Dow Books Triple-Digit Gain
Stocks also rose Tuesday as above-consensus earnings reports helped investors move past an appearance by Fed Chairman Ben Bernanke on Capitol Hill where he gave no indication that another round of quantitative easing was likely this summer. Bernanke was back on Capitol Hill Wednesday, delivering the same message to a House committee.
On the data front, there was more positive news for the housing market following the National Association of Home Builders report Tuesday of the monthly jump in homebuilder sentiment. The Department of Commerce reported that housing starts rose 6.9% in June to a seasonally adjusted annual rate of 760,000, from May's upwardly revised 711,000. Economists surveyed by Thomson Reuters expected a June pace of 745,000.
Adrian Day, president of Adrian Day Asset Management, while finding the housing market data heartening, was already mentally moving on to tomorrow's initial jobless claims report.
"Employment -- whether claims, new jobs, unemployment -- the employment picture is much more important than housing," he emphasized. "Employment is really the central thing... It also seems to be the one that the Federal Reserve, particularly Bernanke, is putting [as] paramount."On the first day of his semi-annual testimony about the economy Tuesday on Capitol Hill, Bernanke cautioned that improvements in the unemployment rate will likely continue at a "frustratingly" slow pace. "The jobs numbers tomorrow will be really important," Steve Ayer, managing director and partner at HighTower agreed. "People will be looking to see how much there is in the seasonal adjustment." "You'll see that seasonal adjustment to be factored in and see a much higher number, but based on what that adjustment is and the severity of it," Ayer added. Building permits fell 3.7% to a seasonally adjusted annual rate of 755,000, but from the upwardly revised May rate of 784,000. Economists, on average, expected a rate of 765,000 for June. The FTSE in London closed up 1.01% and the DAX in Germany finished ahead by 1.62%. Hong Kong's Hang Seng index finished down 1.11% and the Nikkei in Japan closed down 0.32%. August crude oil futures settled up 65 cents at $89.87. August gold futures lost $18.70 to settle at $1,570.80. The benchmark 10-year Treasury was up 2/32, lowering the yield to 1.501%, while the greenback turned lower, down 0.06%, according to the dollar index.
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