Fed Talks, Solar Stocks Inspire Market Gains
NEW YORK (TheStreet) -- U.S. markets rose against the odds Tuesday, though continuing tensions in Iraq and cautiousness as the Federal Reserve began its two-day policy meeting capped any big gains.
Relief in oil prices eased concerns over the turmoil in Iraq, removing some downward pressure caused by geopolitical uncertainty. The Dow Jones Industrial Average was up 0.16% to 16,808.49, the S&P 500 added 0.22% to 1941.99, and the Nasdaq rose 0.37% to 4,337.23. Crude oil futures for July were down 68 cents to $106.22 a barrel after a 4% increase last week.
President Obama on Monday informed Congress that he would be sending as many as 275 military personnel to Iraq to provide support and security for U.S. personnel and the U.S. Embassy in Baghdad. Obama will meet with House and Senate leaders on Wednesday to discuss further U.S. intervention, Senator McConnell said Tuesday.
European markets staged a mild rebound Tuesday, partly in response to a slight reduction in oil prices and a hope that, for now, the renewed conflict in Iraq has been priced in.Confidence in the U.S. housing market recovery experienced a setback Tuesday following a greater-than-expected decline in May housing starts and building permits. Housing starts fell 6.5% to a seasonally adjusted annual pace of just more than 1 million units in May. There was also a downward revision to an increase of 12.7% in housing starts in March. Building permits fell 6.4% to an annual pace of 991,000 last month. The Consumer Price Index increased at its fastest pace in more than a year for May, up 0.4% from the prior month. The mixed economic results could impact discussions on short-term interest rates as Federal Reserve officials begin their meeting Tuesday. Investors largely expect the meeting to result in another $10 billion reduction in its monthly bond purchases. In corporate news, SolarCity (SCTY) spiked 17.6% to $64.53 after agreeing to acquire solar tech company Silevo. Though terms of the deal were not disclosed, Chairman Elon Musk said the company intends to build the single largest solar panel production plants in the world in New York State. Solar stocks received a big boost from the news: SunPower (SPWR) added 4.3%, Sunedison (SUNE) gained 3% and Real Goods Solar (RGSE) surged 16.5%. Yingli Green Energy (YGE) added 12.2% to $3.95 after reporting a quarterly loss nearly half losses a year earlier. Gross margins also increased to 15.7% from 4.1% as the company gained a better grip on costs. General Motors (GM) gained 0.83% despite announcing another wave of recalls. The latest, a total 3 million defective vehicles, brings its total since the beginning of the year to over 20 million. Tesla (TSLA) was a heavy-volume gainer on Tuesday, up 3.1% to $231.67. A bill that would allow electric car maker Tesla Motors to open four showrooms in New Jersey and sell directly to consumers in the state got Assembly approval Monday, according to reports. Adobe Systems (ADBE) is a stock to watch after the bell. The software maker, is forecast by Wall Street to report on Tuesday fiscal second-quarter profit of 30 cents a share on revenue of $1.03 billion. U.S. stocks on Monday finished higher, though gains were constricted by escalating violence in Iraq. --By Keris Alison Lahiff and Andrea Tse in New York June 17 Premarket Briefing: 10 Things You Should Know European Stocks Stage a Mild Rebound U.S. Markets Pull Ahead Though Geopolitical Threats Confine Gains
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