Encouraging economic readings on housing and factory orders
combined to lift the markets into the green for the second
consecutive day. Investors did keep in mind lingering euro-zone
debt woes ahead of the European Summit, but domestic sentiment and
the strength in energy shares overshadowed cross-Atlantic
worries.
The Dow Jones Industrial Average (DJI) gained 0.7% and was up to
12,627.01. The Standard & Poor 500 (S&P 500) surged 0.9%
and finished yesterday's trading session at 1,331.85. The
tech-laden Nasdaq Composite Index settled 0.7% or 21.26 points
higher at 2,875.32. The fear-gauge CBOE Volatility Index (VIX)
moved marginally lower, by 1.4% to settle at 19.45. Total volumes
on the New York Stock Exchange were 3.29 billion shares. Advancers
outpaced the decliners on the NYSE; as for 76% stocks that gained,
21% stocks closed lower.
For the second time in a row benchmarks ended in the green,
thanks to positive domestic economic data. The National Association
of Realtors came out with data on pending home sales, which matched
the highest level recorded over the last two years. According to
the report, the Pending Home Sales Index jumped to 101.1 in May, up
5.9% from 95.5 in April. This was also 13.3% higher than the
year-ago level of 89.2 and the rate of increase far outpaced
consensus expectations of a jump of 1.8%. Lawrence Yun, NAR chief
economist, sounded positive on the housing sector saying: "The
housing market is clearly superior this year compared with the past
four years. The latest increase in home contract signings
marks 13 consecutive months of year-over-year gains." "Actual
closings for existing-home sales have been notably higher since the
beginning of the year and we're on track to see a 9 to 10 percent
improvement in total sales for 2012," he added.
Buoyed by the positive data, SPDR S&P Homebuilders (XHB)
jumped 1.8% and stocks including Lennar Corp. (NYSE:
LEN
), PulteGroup, Inc. (NYSE:
PHM
), KB Home (NYSE:
KBH
), Toll Brothers Inc. (NYSE:
TOL
), DR Horton Inc. (NYSE:
DHI
), Hovnanian Enterprises Inc. (NYSE:
HOV
) and Beazer Homes USA Inc. (NYSE:
BZH
) gained 4.8%, 1.7%, 3.0%, 3.9%, 2.3%, 5.2% and 4.4%,
respectively.
Meanwhile, the U.S. Department of Commerce also reported
positive factory order numbers. According to a report by the U.S.
Census Bureau, new orders for manufactured durable goods jumped
1.1% or $2.3 billion in May to $217.2 billion. The upside in new
orders came after two back-to-back months of declines and also
outpaced consensus estimates of an increase of just 0.3%.
Separately, an uptick in oil prices helped energy shares clock
up gains. Posting a strong performance, the Energy Select Sector
SPDR (XLE) jumped 2.0% and stocks such as Chevron Corporation
(NYSE:
CVX
), Nabors Industries Ltd. (NYSE:
NBR
), NRG Energy Inc (NYSE:
NRG
), Cabot Oil & Gas Corporation (NYSE:
COG
), Berry Petroleum Company (NYSE:
BRY
) and Tesoro Corporation (NYSE:
TSO
) soared by 1.6%, 5.6%, 6.0%, 9.0%, 8.2% and 2.0%,
respectively.
Luckily, there were no major headlines from the other side of
the pond that could dent the positive sentiment. Investors did keep
in mind lingering woes in the Euro-zone ahead of the European
Summit that commences on Thursday. Meanwhile, German Chancellor was
reported to have warned that there might not be any immediate fix
for the "structural measures." She said: "I fear that at [the
summit] there will again be far too much talk about all possible
ideas for common liability and far too little about better controls
and structural measures".
BERRY PETROLEUM (BRY): Free Stock Analysis
Report
BEAZER HOMES (BZH): Free Stock Analysis Report
CABOT OIL & GAS (COG): Free Stock Analysis
Report
CHEVRON CORP (CVX): Free Stock Analysis Report
D R HORTON INC (DHI): Free Stock Analysis
Report
HOVNANIAN ENTRP (HOV): Free Stock Analysis
Report
KB HOME (KBH): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis
Report
NABORS IND (NBR): Free Stock Analysis Report
NRG ENERGY INC (NRG): Free Stock Analysis
Report
PULTE GROUP ONC (PHM): Free Stock Analysis
Report
TOLL BROTHERS (TOL): Free Stock Analysis Report
TESORO CORP (TSO): Free Stock Analysis Report
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