Updated from 4:15 p.m. EDTStocks in New York were strong early Wednesday, sluggish in the afternoon and then positive again into the close, leaving the major averages higher for the session. The Dow Jones Industrial Average rose 89.84 points, or 1.2%, to 7749.81, and the S&P 500 tacked on 7.63 points, or 1%, to 813.88. The Nasdaq Composite added 12.43 points, or 0.8%, to 1528.95.
President Obama defended his budget and economic-recovery efforts in an address Tuesday evening, and when the new day arrived on the trading floors, the newest slate of housing and data implied that at least some aspects of the economy could be rebounding. The Commerce Department said orders for manufactured durable goods in February increased $5.5 billion, or 3.4%, to $165.6 billion, vs. a revised 7.3% drop in January, and the expectation for a 2.5% decline. It was the first increase in orders for big-ticket items like cars, appliances and airplanes in six months. Excluding transportation, new orders rose 3.9% in February, also far better than the expectation for a 2% drop. Excluding defense, new orders increased just 1.7%. "You have to take into account that there was a fair amount of monetary stimulus injected, in addition to the TALF, which does have a credit-thaw effect on some of these situations," says Roberts. Still, one of the reasons February looked so good was because January was revised downward to a decline of 7.3% from a first-estimated 5.2% drop, he says. "And a lot of the February increase was concentrated in defense, so we have to be careful not to read too much into it." Meanwhile, sales of new single-family houses in February were at a seasonally adjusted annual rate of 337,000, up from 322,000 in January, according to the Census Bureau and the Department of Housing and Urban Development. The figure topped expectations for 300,000 but is still the second worst on record and 41% lower than a year earlier. The supply of unsold new homes is 12.2 months at the current sales rate, vs. 12.9 in January. The median sales price of new houses sold in February was $200,900, and the average sales price was $251,000.
In corporate news, Blockbuster ( BBI) said it is signing a deal with TIVo ( TIVO) to make "Blockbuster On Demand" available via TIVo digital video recorders. Blockbuster gained 7 cents, or 9.6%, to 80 cents, while TIVo added 3.5% to $7.20. Elsewhere, Dow component General Electric ( GE) said it has won a $300 million contract for work on a new PetroChina ( PTR) natural gas pipeline in China. GE shares advanced 0.8% to $10.49. PetroChina also reported that its net profit fell 22% in 2008 from a year earlier as the sector suffered from lower prices and weakening demand. Shares of the world's second-biggest energy company by market value added 1.6% to $84.63 on Wednesday. The Energy Information Administration reported that U.S. crude oil inventories jumped 3.3 million barrels to 356.6 million last week, the highest since 1993. Analysts had predicted a more modest increase of 1.3 million barrels. But there was some good news in terms of supply, as stockpiles at the Nymex delivery point in Cushing, Okla., fell by 2.2 million barrels. Also gasoline stores were down 1.1 million barrels and distillates declined 1.6 million barrels. Oil fell $2.05 to settle at $52.77 a barrel, while gold was up $9.80 to $935.80 an ounce. Longer-dated Treasuries were dropping. The 10-year note was giving back 20/32 to yield 2.8%, while the 30-year was lower by 1-21/32, yielding 3.7%. The dollar was gaining against the yen, but weaker against the euro and pound. As for markets overseas, London's FTSE 100 was down 0.3%, and the Frankfurt Dax was higher by 0.9%. In Asia, Hong Kong's Hang Seng and Tokyo's Nikkei both closed in negative territory.