The broad indexes also rose after the S&P/Case-Shiller 20-City Home Price Index showed that home prices fell by 1.9% in April from a year earlier, which was an improvement from March's 2.6% year-over-year decline. Home prices on average increased 1.3% in April from March, after seven consecutive monthly declines. Prices increased for 19 out of the 20 metropolitan statistical areas comprising the survey, with only Detroit showing a decline of 3.6% from March to April.
David Blitzer, the chairman of the Index Committee at S&P Indices said "while one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign."
Also on Tuesday, top Eurozone officials led by European Council president Herman Van Rompuy released a report suggesting a "stronger EMU Architecture," including an "integrated financial framework" that would include a "single European banking supervision and a common deposit insurance and resolution framework." This would in some respects mirror bank supervision in the United States, where even banks chartered and supervised on the state level are subjected to additional supervision by the Federal Deposit Insurance Corp. or the Federal Reserve.The European Council's suggestions also include "greater pooling of decision making on budgets commensurate with the pooling of risks," and "effective mechanisms to prevent and correct unsustainable fiscal policies in each Member State." Under the Council's proposals, EU member nations would have "upper limits on the annual budget balance and on government debt levels... agreed in common." In order to make progress toward issuing EU-level bonds, the council said that "the process towards the issuance of common debt should be criteria-based and phased, whereby progress in the pooling of decisions on budgets would be accompanied with commensurate steps towards the pooling of risks." European leaders will meet on Thursday and Friday to discuss the proposals. The KBW Bank Index (I:BKX) rose 1% to close at 44.14, with 17 of the 24 index components rising for the session.
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