Dow Closes Higher on Positive Housing Data
NEW YORK (TheStreet) -- Stock markets closed higher Tuesday amid the release of housing data which underscored the ongoing economic recovery despite being slightly below expectations.
- The Dow Jones Industrial Average gained 0.56% to 16,367.88, while the S&P 500 was up 0.44% to 1,865.62. The Nasdaq was 0.19% higher to 4,234.27.
- The Case-Shiller 20-city home price index for January rose at an annualized rate of 13.2% from a year earlier, slightly below forecasts for a 13.3% gain and following a rise of 13.4% in December. The Federal Housing Finance Agency Housing Price Index for January rose 0.5% from the prior month after having shown increases for 23 of the past 24 months. In reviewing the data, Barclays analysts said they expected home price appreciation of 7% to 8% in 2014, a slower pace of growth than last year. New U.S. homes sold at an annual rate of 440,000 in February, down 3.3% from January's one-year high and slightly below expectations for a result of 445,000.
- In other economic news, consumer confidence rose in March despite higher food prices and bad weather, posting 82.3 up from 78.3 in February. This is the highest reading since January 2008. Philadelphia Federal Reserve Bank President Charles Plosser, a policy hawk, and Atlanta Federal Reserve Bank President Dennis Lockhart, an FOMC alternate member and dove, will be speaking about the economic outlook later this evening.
- Walt Disney (DIS) settled little changed at $79.56 a share after agreeing to acquire Maker Studios, a leading network of online video content on YouTube, for $500 million. If certain performance targets are met, the number could increase to $950 million.
- Walgreen (WAG) gained 3.3% even as the company posted fiscal second-quarter earnings that missed by 2 cents at 91 cents a share and a same-store sales increase of 4.3%. The company heads into the second half of the year with expectations that the generic drug headwind that affected the first half will ease and turn around by the end of the year.
- Rackspace Hosting (RAX) was up 3.5% after being bolstered to "overweight" from "equal-weight" by Morgan Stanley analysts.
- Sonic (SONC) jumped 11% after announcing second-quarter earnings that beat analysts' estimates, while Carnival (CCL) dropped 5% after cutting full-year profit forecasts.
- Top gainers in the Dow included IBM (IBM)and Cisco (CSCO) which were gaining 3.53% and 3% while McCormick (MKC) and Seagate Technology (ALXN) led gains in the S&P, up 5.5% and 4%, respectively.
- International markets were mixed, with the Nikkei 225 closing down 0.36%, the Hong Kong Hang Seng finishing off 0.52% as markets in Asia were still digesting soft China and U.S. manufacturing data. The FTSE 100 finished up 1.30% and the DAX in Germany was higher by 1.63%. U.S. markets closed lower Monday, ceding early gains after poor manufacturing data in the U.S. and China, the world's first- and second-largest economies.
- S&P Capital IQ's chief equity strategist Sam Stovall said that the markets are more focused right now on very near-term events rather than events that what could happen further out, such as the Fed hiking interest rates, adding that in the coming days, portfolio managers will probably be busy concentrating on end-of-quarter window dressing. "Investors are probably better off today focusing on such mundane issues as the approaching Q1 reporting season," Stovall added in a recent note.
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