U.S. Stocks Rise After Reports on Housing, Consumer Confidence
By Kelly Bit – Aug 31, 2010 9:12 PM GMT+0700
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U.S. stocks rose, paring the monthly decline on benchmark indexes, as consumer confidence and home- price increases beat economist estimates.
Toll Brothers Inc. rose 1.1 percent after a gauge of home prices advanced more than expected in June. Caterpillar Inc. and DuPont Co. increased at least 1 percent to lead gains in the Dow Jones Industrial Average. Ford Motor Co., the only major U.S. automaker to avoid bankruptcy, slipped 0.7 percent ahead of auto-sales figures tomorrow.
The Standard & Poor’s 500 Index gained 0.2 percent to 1,050.73 as of 10:06 a.m. in New York. The Dow Jones Industrial Average declined 15.74 points, or 0.2 percent, to 10,025.47. About seven stocks advanced for every five that fell on U.S. exchanges.
“Market valuations are at attractive levels,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages $18 billion. “We’re taking the approach of sitting in the middle and waiting for a more clear sign. We’re expecting that’s not going to develop very quickly.”
The S&P 500 lost 1.5 percent yesterday after a smaller- than-forecast gain in personal incomes added to concern the economic rebound may slow further. The measure erased almost all of its 1.7 percent rally on Aug. 27 when Federal Reserve Chairman Ben S. Bernanke vowed to safeguard the economy. The gauge has lost 4.8 percent this month and is down 5.9 percent in 2010 through yesterday.
U.S. Home Prices
Home prices in 20 U.S. cities rose a more-than-forecast 4.2 percent in June from a year earlier, according to the S&P/Case- Shiller index of property values, reflecting the influence of a government tax incentive and a sign the market was stabilizing before sales plunged in July. The median estimate of economists surveyed by Bloomberg News called for a 3.5 percent advance. The index is a moving three-month average, so the June data are still being influenced by transactions in April and May that may have benefitted from the government incentive.
Toll Brothers added 1.1 percent to $17.25, while Pulte Group Inc. gained 1.4 percent to $8.17.
Stocks moved higher after the Conference Board’s consumer- confidence index increased to 53.5 in August from a five-month low of 51 in July, figures from the New York-based private research group showed today. The median forecast of economists in a Bloomberg News survey was for a gain to 50.7.
Caterpillar added 1.8 percent to $65.60, while DuPont advanced 1.3 percent to $40.83.
Ford dropped 0.7 percent to $11.27. U.S. auto sales, to be released tomorrow, will probably show that this year had the slowest August since 1982 as model-year closeout deals failed to entice consumers.
Industrywide deliveries reached an annualized rate of 11.6 million vehicles this month, according to the average of eight analysts’ estimates compiled by Bloomberg. That would be the slowest August in 28 years, according to researcher Ward’s AutoInfoBank.
Research In Motion Ltd. lost 3.6 percent to $43.96. The Blackberry maker faces “a scary outlook” in the corporate market, Sanford C. Bernstein & Co. said in a note, which cited the segment’s high e-mail penetration and the threat from other smartphone makers.
Saks Inc. jumped 24 percent to $8.18. The New York-based luxury retail chain may get a bid of $11 a share, or $1.7 billion, from a consortium of U.S. and U.K. private equity firms, the Daily Mail reported.