Updated from 3:25 p.m. EDTStocks in New York hung onto their slice of green on St. Patrick's day, with tech leading the charge. The day brought surprisingly positive housing data, but also daunting outlooks from some key industrial stocks. Alcoa ( AA) fell 9.3% after cutting its dividend, but that wasn't enough to hold down the Dow Jones Industrial Average, which rose 179.53, or 2.5%, to 7396.50. The S&P 500 added 24.19 points, or 3.2%, to 778.08. The Nasdaq fared the best, adding 58.09 points, or 4.1%, to 1462.11. Chipmakers were on the move, with National Semiconductor ( NSM) adding 6%, and Advanced Micro Devices ( AMD) tacking on 11%. Since the latest lows, we've "had every administration official that can get in front of a camera say no banks are going to fail, and it's starting to take hold," says Marc Pado, U.S. market strategist for Cantor Fitzgerald. Also, "we've now had several banks report that they were profitable so far this year," he says, and that can't hurt. "Since then, you had strong leadership in technology, not only did it not come close to taking out the November low, but it's also been very strong in this rally," says Pado. "When you see money flowing into tech, it says we're starting to have some faith that when we see growth these are the companies that are going to outperform later this year." In other tech news Tuesday, Apple ( AAPL) introduced new iPhone applications, while Dell ( DELL) released its Adamo, the latest of the ultra-thin notebook trend. A report from the Commerce Department offered a nice start to the day, showing that new-home construction and building permit applications both rose in February vs. expectations that those metrics would fall to new record lows.
Housing starts rose to 583,000 from 477,000 in January, the first rise since May of 2008, although it was primarily in multi-family units. Building permits increased for the first time since June 2008, to 547,000, from 531,000 in January. "Whether people can afford to purchase a home or obtain the credit necessary to do so is not as important as the fact that they need shelter and will rent space if necessary," wrote Tony Crescenzi, chief bond strategist at Miller Tabak. "The bottom-line is that empty homes will become occupied one way or another, so long as builders under-build relative to population growth." In other economic data Tuesday, the producer price index, which measures wholesale prices, rose 0.1% in February, after an 0.4% increase in January. The core PPI rose 0.2%, just slightly more than expectations. Economic news played opposite some less comforting corporate headlines. Early Tuesday, steelmaker Nucor ( NUE) dramatically lowered expectations for its first-quarter guidance, now expecting a loss of 55 cents to 65 cents a share, while analysts had pegged a profit 41 cents a share. "The economy has fallen off a cliff -- and there is no visibility as to the timing of the recovery," said Dan DiMicco, Nucor's CEO. Dow component Alcoa ( AA) was also sliding after announcing late Monday that in order to deal with the dent in aluminum demand, it will cut its dividend, scale back 2010 spending, and issue $1.1 billion in stock and convertible notes.
Nokia ( NOK) said it plans to lay off 1,700 workers globally at several units, as demand for cell phones wanes and it looks to cut costs. Stocks ended a four-day winning streak on Monday, after AIG ( AIG) riled taxpayers, politicians and investors alike with disclosures that the clearly troubled company plans to pay out millions in bonuses, among other things. In Washington, the Federal Reserve starts its two-day policy setting meeting today, and is expected to keep its key interest rate at a record low range. Looking at commodities, oil rose $1.81 to settle at $49.16, while gold fell $5.20 to $916.80. Europe's largest oil company Royal Dutch Shell said Tuesday that its oil reserves were unchanged at the end of 2008 vs. 2007, marking the first year since 2004 that the company hasn't pumped more oil than it added to the reserves. Stocks in Europe were largely lower, while stocks in Asia were mixed. The FTSE in London and DAX in Frankfurt were lower by more than 1% apiece. In Asia, Hong Kong's Hang Seng fell 0.8%, but Japan's Nikkei added 3.2%. In the bond market, longer-dated Treasuries were recently rising. The 10-year note was adding 6/32 to yield 3%, and the 30-year was gaining 24/32, yielding 3.8%. The dollar was stronger against the yen, euro and pound.