Economic data push Dow up 161 - East Valley Tribune: Business

Economic data push Dow up 161

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Posted: Tuesday, May 27, 2003 12:22 pm | Updated: 1:46 pm, Thu Oct 6, 2011.

NEW YORK - A pair of encouraging economic reports - one on consumer confidence, the other on home sales - gave Wall Street a shot of adrenaline Tuesday, sending the Nasdaq composite to its best level in nearly a year.

The Dow Jones industrials also soared, moving up 160 points.

"Housing sales were pretty good and consumer confidence was a decent number. People saw that as a positive and decided, 'Let's pick up some bargains,' after last week's declines," said Todd Leone, managing director of equity trading at SG Cowen Securities.

Trading was moderate following the long holiday weekend. U.S. markets were closed Monday for Memorial Day.

By late afternoon, the Nasdaq climbed 43.35, or 2.9 percent, to 1,553.44, following a weekly loss of 1.9 percent to end a five-week winning streak. That was the highest level seen since June 6, 2000, when the tech-focused index closed at 1,554.88.

The Standard & Poor's 500 index gained 16.56, or 1.8 percent, to 949.78, having dropped 1.2 percent last week to also end five weeks of gains. It was the highest level since Aug. 22, when the index closed at 962.70.

And the Dow was up 160.71, or 1.9 percent, at 8,762.09, having fallen 0.9 percent last week to snap a three-week winning streak. That was the best seen since Jan. 14, when the blue chips finished at 8,842.62.

The New York-based Conference Board reported Tuesday its consumer confidence index rose to 83.8 in May from 81 in the previous month as consumers grew modestly confident about the economy. Analysts had projected a reading of 84.

Meanwhile, the Commerce Department reported that new home sales gained 1.7 percent from March to April to a seasonally adjusted annual rate of 1.03 million. That marked the best showing since December.

The reports helped overcome investor jitters after the euro briefly hit an all-time high against the dollar Tuesday. The Dow fell as much as 60 points in early trading on fears a weak dollar will deter foreign stock investment before rebounding.

After several weeks of market rallies on upbeat earnings, many investors are looking for more concrete signs of an economic recovery. Analysts say Tuesday's reports offered some of that evidence, although they added that trading will still likely be choppy and confined to a range until investors see more positive data.

"This isn't going to be a daily event," said Hugh Johnson, chief investment officer at First Albany Corp., referring to Tuesday's market gains. "The problem is valuation. We have come very far, very fast. It's ahead of itself and it's time for a breather."

Gainers included AOL Time Warner, which increased 29 cents to $15, after Stephen Case, who orchestrated AOL's acquisition of Time Warner, has spoken favorably about spinning off the online unit, The New York Times reported.

Wal-Mart rose 40 cents to $52.40 after the discounter said May sales were on track to meet its estimates, citing good sales after consumers stocked up on items before the holiday weekend.

But Altria Group, the parent of Philip Morris, fell 4 cents to $42.27 after UBS Warburg downgraded the company's stock, citing overvaluation after a favorable ruling in a Florida tobacco class-action suit.

Vodafone dropped 40 cents to $20.54 after the British mobile phone giant reported a narrower loss for the fiscal year, citing stronger sales.

Advancing issues outnumbered decliners about 5 to 2 on the New York Stock Exchange. Volume came to 1.16 billion shares, compared with 963.82 million traded at the same point Friday.

The Russell 2000 index, which tracks smaller company stocks, rose 8.56, or 2.1 percent, to 426.96.

Overseas, Japan's Nikkei stock average finished 1.3 percent lower Tuesday. In Europe, France's CAC-40 rose 0.4 percent, Britain's FTSE 100 gained 0.3 percent and Germany's DAX index increased 0.3 percent.

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