A rebound in consumer confidence and more healing in the housing industry put stocks back on an upward path. Banks, retailers and homebuilders were Tuesday’s biggest winners, helping to lift the major indexes about 0.3 percent. Energy and utility stocks fell sharply as oil prices cooled following a recent surge.
NEW YORK (AP) — A rebound in consumer confidence and more healing in the housing industry put stocks back on an upward path.
Banks, retailers and homebuilders were Tuesday’s biggest winners, helping to lift the major indexes about 0.3 percent. Energy and utility stocks fell sharply as oil prices cooled following a recent surge.
Though investors were pleased by better-than-expected readings on consumers and housing, trading was choppy as it has been over the past week. Despite improving economic data, the market is still generally cautious.
After a 52 percent climb in the S&P 500 since early March, investors are questioning how much further stocks have to go, especially in the absence of data showing actual growth in the economy.
“The upward trend has still not broken,” said Brian Daley, sales trader at Conifer Securities. “It’s too dangerous to fight the trend in the market, even though clearly a lot of people are nervous that it’s too extended.”
Stocks rose after the Conference Board said its Consumer Confidence index rose to 54.1 this month from an upwardly revised 47.4 in July. That was far above the 47.5 reading analysts expected. Still, the report is a long way from showing that consumers are actually feeling optimistic about the economy amid ongoing worries about job losses. But it suggests Americans’ pessimism about the economy is abating.
Meanwhile, the Standard & Poor’s/Case-Shiller U.S. National Home Price Index rose 1.4 percent in the second quarter from the January-March period, the first quarterly increase in three years. Home prices, while still down almost 15 percent from last year, are at levels last seen in early 2003.
The improvements in consumer confidence and housing are related. If consumers are feeling better about the economy, they will be willing to spend a little more on houses, not to mention cars, appliances and other goods and materials. Investors’ concerns about flagging consumer confidence have triggered bouts of stock selling in recent weeks.
Stocks also got a boost from President Barack Obama’s reappointment of Ben Bernanke as Federal Reserve chairman. Bernanke’s reappointment, though expected, came sooner than anticipated and removed any uncertainty about a potential replacement.
According to preliminary calculations, the Dow rose 30.01, or 0.3 percent, to 9,539.29. The Standard & Poor’s 500 index rose 2.43, or 0.2 percent, to 1,028.00, while the Nasdaq composite index rose 6.25, or 0.3 percent, to 2,024.23.