- The Washington Times - Wednesday, May 28, 2008

NEW YORK (AP) - Wall Street advanced in uneven trading yesterday after a drop in oil prices and an unexpected gain in new-home sales encouraged investors to put money back into the market.

Stocks picked up momentum late in the session as oil prices drifted below $129 a barrel. This helped ease investor concerns about the affect of soaring energy and food prices on consumers, who account for more than two-thirds of U.S. economic activity.

With gas prices up sharply from a year ago, many on Wall Street are worried that nervous consumers will stop reaching into their wallets for discretionary purchases. That was confirmed by fresh data from the Conference Board, which said its Consumer Confidence Index dropped for the fifth straight month and is now at its lowest level since October 1992.

Investors were also somewhat reassured after the Commerce Department said sales of new homes rose 3.3 percent in April to a seasonally adjusted rate of 526,000 units. In March, sales had fallen 11 percent to their weakest pace since 1991.

The three major indexes traded with uncertainty through most of the session, and showed investors remained hesitant to place big bets.

The Dow Jones Industrial Average rose 68.72, or 0.55 percent, to 12,548.35.

The Standard & Poor’s 500 Index rose 9.42, or 0.68 percent, to 1,385.35, and the Nasdaq Composite Index rose 36.57, or 1.50 percent, to 2,481.24.

The advance came after the Dow lost 3.91 percent last week - its worst showing since February - while the other indexes showed similar declines. Investors sold off stocks amid concerns about rising energy prices and after a sizable run-up since the market’s lows in mid-March.

Bond prices fell yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.92 percent from 3.85 percent late Friday.

A barrel of light sweet crude fell $3.34 to settle at $128.85 on the New York Mercantile Exchange. Gold fell, while the dollar gained.

Earlier in yesterday’s session, the Standard & Poor’s/Case-Shiller Home Price Index indicated that prices fell 14.1 percent during the quarter. However, the drop was expected by most investors - and the government’s report on new home sales was considered more important because it is the most recent gauge on the industry.

Todd Salamone, director of trading at Schaeffer’s Investment Research in Cincinnati, said investors were also focused ahead of more economic data due during the week.

“There’s a ton of reports that will give us a better idea about the consumer, and that’s what we’re watching,” he said.

Economic reports scheduled include today’s government data on durable goods that will provide more insight into consumer spending on big-ticket items. On Friday, the University of Michigan will release its report on consumer sentiment, the government data will issue personal spending numbers and the Chicago Purchasing Managers Index will be released.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide