Nothing here about April homebuyer credits expiration supporting Feb sales. Just riding the trend
Do have this great quote of the day:
"Look at the daily charts. They just grind higher. We call it the sausage factory. At the end of the day it tastes great but nobody knows how it's made," Saluzzi said.
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Stocks climb after home sales top expectations
Stocks continue to grind higher after sales of existing homes fall less than analysts forecast
ap
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Companies:
o Federal National Mortgage Association
o Freddie Mac
o KB Home
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Topics:
o Stocks
o Industrial Goods
Stephen Bernard and Tim Paradis, AP Business Writers, On Tuesday March 23, 2010, 3:43 pm
NEW YORK (AP) -- Stocks punched higher Tuesday to extend their streak of gains after sales of existing homes fell less than expected.
The Dow Jones industrial average rose about 90 points in late afternoon trading and broader indexes also climbed.
The report from the National Association of Realtors was typical of recent economic numbers that have been somewhat better than expected but still point to a weak economy. Sales of previously occupied homes fell 0.6 percent last month to an annual rate of 5.02 million. Analysts expected sales would fall to 5 million units, according to Thomson Reuters.
For now, the sales numbers aren't erasing hopes that the economy can recover even if there is only a slow stabilizing in the housing market. The Commerce Department is expected to report new home sales for February on Wednesday. A month ago, investors shrugged off an 11.2 percent drop in sales of new homes.
The market's continuing advance has been welcome but analysts are divided over whether stocks have run too far or if they have more to gain because of improvements in the economy. The recent gains have been mild in contrast to those of 2010 when triple-digit gains in the Dow were frequent as the index soared higher from a 12-year low.
Even many traders who have doubts about how solid the advance is expect it to continue until something pops the optimistic mood.
"You can't deny the trend. Definitely the trend is higher," said Doreen Mogavero, president of brokerage Mogavero, Lee & Co. in New York. She said investors are optimistic about the health of corporate earnings for the January-March quarter.
"Things seem to be moving along in the right direction. So to that end I think people are feeling better."
But Mogavero is cautious because the advance has come in light trading volume, which signals that not many investors are willing to put money into the market.
In the final hour of trading, the Dow rose 91.00, or 0.8 percent, to 10,876.89. The Dow has risen in nine of the past 10 days.
The Standard & Poor's 500 index rose 7.21, or 0.6 percent, to 1,173.02, while the Nasdaq composite index rose 18.67, or 0.8 percent, to 2,414.07.
Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.68 percent from 3.66 percent late Monday.
The dollar rose against most other major currencies. Gold rose.
Crude oil rose 66 cents to $81.91 per barrel on the New York Mercantile Exchange.
Stocks rose Monday after House lawmakers on Sunday approved a health care overhaul bill that will extend health insurance to 32 million Americans. Drug and hospital companies rose in part because of the prospect of increased demand.
Joe Saluzzi, co-head of equity trading at Themis Trading LLC, said the market has continued higher because traders don't want placing short-term bets, not because of strong belief that stock prices are too low. That makes the advance difficult to justify, he said.
"Look at the daily charts. They just grind higher. We call it the sausage factory. At the end of the day it tastes great but nobody knows how it's made," Saluzzi said.
Traders showed little reaction Tuesday to Treasury Secretary Timothy Geithner's testimony before Congress about government efforts to overhaul mortgage financiers Fannie Mae and Freddie Mac. The pair, which were taken over by the government during the credit crisis, guarantee a majority of mortgages. The government's support has helped keep interest rates low as part of an effort to help the housing market recover.
Investors found some news about housing that they didn't like. Homebuilder KB Home slid 27 cents, or 1.6 percent, to $17.17 after its fiscal first quarter loss was wider than expected and revenue fell short of forecasts.
Two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 736.9 million shares, compared with 726.4 million traded at the same point Monday.
The Russell 2000 index of smaller companies rose 7.71, or 1.1 percent, to 690.62.
Britain's FTSE 100 rose 0.5 percent, Germany's DAX index gained 0.5 percent, and France's CAC-40 rose 0.6 percent. Japan's Nikkei stock average fell 0.5 percent.
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