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NEW YORK (AP) â¿¿ That screeching sound you heard in May? That was the stock market.
While the month ended with four days of gains in most of the indexes, concerns about high gas prices, tornadoes and flooding in the South, the post-natural disaster slowdown in Japan and the debt crisis in Europe sent the Standard and Poor's 500 stock index down 1.4 percent in May. That decline followed a 2.85 percent increase in April, which followed gains that set the fastest pace in the first quarter since 1998. Before this month, stocks were boosted by higher corporate earnings, increased business spending and a global economic expansion.
May was the first down month for the S&P since August 2010.
Other risky assets also saw declines in May, following a year of increases. The prices of commodities like oil, cattle and coffee fell by an average of 7 percent. Meanwhile, Treasury bond prices, which tend to rise when investors fear that the economy is slowing, rose to near their highest level of the year.
For Tuesday, the stock market ended higher, on signs that Germany might drop its demands for an early rescheduling of Greek bonds, paving the way for a deal that could prevent Greece from defaulting on its debt. The S&P index gained 14.10, or 1.1 percent, to 1,345.20. The Dow Jones industrial average added 128.21, or 1 percent, to 12,569.79. And the Nasdaq composite rose 38.44, or 1.4 percent, to 2,835.30.
These gains came in spite of another grim report on the U.S. housing market. Home prices in in 12 of the 20 cities tracked by the Standard & Poor's/Case-Shiller index dropped in March to the lowest levels since the housing bubble popped in 2006. "Home prices continue on their downward spiral with no relief in sight," said David Blitzer, chairman of the index committee at S&P Indices.