While you were sleeping: U.S. housing thaws
While you were sleeping: U.S. housing thaws, stocks rise
April 2 – The U.S. housing slump showed tentative signs of improvement in February, based on sales of existing homes, while manufacturing gained for a third month in March, stoking optimism the recession may be abating.
Pending contracts to buy existing homes rose 2.1%, according to the National Association of Realtors. The Institute for Supply Management’s factory index rose to 36.3 in March, still below the reading of 50 that separates expansion from contraction.
Stocks on Wall Street rose after the data. The Dow Jones Industrial Average advanced 2% to 7761.60 and the Standard & Poor’s 500 rose 1.7% to 811.80. The Nasdaq Composite climbed 1.5% to 1551.60.
American Express gained 7.4% to US$14.44, leading the Dow higher. Citigroup rose 5.9% to US$2.68 and JPMorgan Chase gained 5.9% to US$28.14 after Treasury Secretary Timothy Geithner said there are signs that financial markets are improving.
“You’re seeing encouraging signs of improvement in our markets - we want to reinforce that,” Geithner told Bloomberg Television.
Standard Pacific Corp., a home-building and financial services company, rose 6.8% to 94 cents.
General Motors slipped 0.5% to US$1.93, leading the Dow lower after the Wall Street Journal reported that President Barack Obama sees a negotiated bankruptcy is the most effective way for the automaker to restructure. Obama is also prepared to let Chrysler go bankrupt if its alliance with Italy’s Fiat falters, the Journal said, citing people family with the situation.
The federal government is unlikely to
extend the 60-day deadline it
imposed on GM to
restructure and won’t repay $1 billion in convertible
notes maturing June 1, Bloomberg reported, citing a person
with knowledge of the discussions.
The slide in U.S. auto sales slowed last month as automakers fattened incentives to buyers to an average US$3,169 per unit, according to online monitoring firm Edmunds.com.
GM’s sales tumbled a less-than-expected 45% in March, Ford’s fell 41% and Chrysler’s tumbled 36%. Toyota’s sales dropped 39% and Honda’s fell 36%.
Copper rose
after the U.S. housing and manufacturing reports lifted
optimism that the recession may be abating.
Copper
futures for May delivery edged up 0.2% to US$1.849 a pound
on the New York Mercantile Exchange.
Still, crude oil fell after U.S. Energy Department figures showed stockpiles rose to a 15-year high last week, suggesting demand for fuel remains weak. Crude oil stockpiles rose by 2.8 million barrels to 359 million last week.
Crude oil for May delivery fell 2.6% to US$48.39 a barrel on the New York Mercantile Exchange. Gold for June delivery rose 0.4% to US$928.70 an ounce in New York.
In Europe, the jobless rate climbed to a higher-than-expected 8.5% in February, a three-year high, according to the European Union’s statistics office.
The euro held near a two-week low against the U.S. dollar after the employment data. It traded at $1.3231 from $1.3250. The euro weakened to 130.44 from 131.13. The yen slipped to 98.55 per dollar from 98.96.
The Dow Jones Stoxx 600 Index rose 1.6% to 179.26, led by a 25% gain for consumer electronics chain DSG International. Allied Irish Banks jumped 20% and Bank of Ireland rose 12%.
The U.K.’s FTSE 100 gained 0.8% to 3955.61, Germany’s DAX 30 rose 1.1% to 4131.07 and France’s CAC 40 gained 1.2% to 2839.61.
(Businesswire)