Closing Bell: Strong Economic Data Lift Stocks

Bloomberg via Getty Images

A raft of positive economic news boosted investor sentiment on Tuesday, and the institution that rocked world markets yesterday, the People’s Bank of China, allayed traders’ fears somewhat with reassuring comments about keeping interest rates “reasonable”. The market rallied as a result, with the Dow Jones industrial average gaining 102 points to close at 14,761. The SP 500 added 15 to end at 1,588, and the Nasdaq rose 27 to 3,348.

The first encouraging number showed that orders for durable manufactured goods rose more than expected in May — commercial aircraft for the most part, but also computers, communications equipment, machinery and metals — suggesting increased business activity.

Then the SP/Case-Shiller index of home prices in 20 cities recorded its largest increase in seven years in April, and existing home sales hit their highest level in five years in May. On top of these happy housing sector developments, the Conference Board’s consumer confidence gauge rose to 81.4 in June, up from 74.3 in May, surpassing estimates of 75.4.

Some stocks and companies that made news on Tuesday:

  • Walgreen’s (WAG) third quarter earnings were up 16 percent but still missed Wall Street forecasts, sending the share price down more than 4.8 percent. Troubling signs like uninspired non-pharmacy sales turned off investors, and the earnings jump was largely due to the company’s weak performance of one year ago, after a business split. But Walgreen’s stock was up 30 percent for the year before Tuesday.
  • Barnes and Noble’s (BKS) sales plummeted, and its Nook e-book device lagged behind competitors by Amazon (AMZN) and Apple (AAPL), causing a net loss more than twice as large as last year’s. As a consequence, the company announced, it will stop making its own Nook color touchscreen tablets, finding a partner to take over that aspect of manufacturing (while continuing to make the basic, black-and-white display devices in house). “We know this is a sizable change from our existing strategy,” CEO William Lynch conceded. The bookseller’s stock sank more than 17 percent, to $15.61.
  • Carnival (CCL) rose almost 1.6 percent after naming a new CEO, board member Arnold Donald. Former chief executive Mickey Arison was ousted following a year of accidents and bad publicity.

Tomorrow brings first-quarter GDP at 8:30. The consensus forecast is a growth rate of 2.4 percent, the same as the previous quarter’s.

The Associated Press contributed to this report.

Article source:

Leave a Reply

WP2FB Auto Publish Powered By :
Bunk Beds