Closing Bell: Strong Economic Data Lift Stocks

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Traders work at the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, June 19, 2013. U.S. stocks were little changed, after the Standard & Poor's 500 Index yesterday reached its highest level in June, as investors awaited the outcome of a Federal Reserve meeting for signs about when it plans to scale back stimulus measures. Photographer: Scott Eells/Bloomberg
Bloomberg via Getty Images
A raft of positive economic news boosted investor sentiment on Tuesday, and the institution that rocked world markets yesterday, the People's Bank of China, allayed traders' fears somewhat with reassuring comments about keeping interest rates "reasonable." The market rallied as a result, with the Dow Jones industrial average gaining 102 points to close at 14,761. The S&P 500 added 15 to end at 1,588, and the Nasdaq rose 27 to 3,348.

The first encouraging number showed that orders for durable manufactured goods rose more than expected in May -- commercial aircraft for the most part, but also computers, communications equipment, machinery and metals -- suggesting increased business activity.

Then the S&P/Case-Shiller index of home prices in 20 cities recorded its largest increase in seven years in April, and existing home sales hit their highest level in five years in May. On top of these happy housing sector developments, the Conference Board's consumer confidence gauge rose to 81.4 in June, up from 74.3 in May, surpassing estimates of 75.4.

Some stocks and companies that made news on Tuesday:
  • Walgreen's (WAG) third quarter earnings were up 16 percent but still missed Wall Street forecasts, sending the share price down more than 4.8 percent. Troubling signs like uninspired non-pharmacy sales turned off investors, and the earnings jump was largely due to the company's weak performance of one year ago, after a business split. But Walgreen's stock was up 30 percent for the year before Tuesday.
  • Barnes & Noble's (BKS) sales plummeted, and its Nook e-book device lagged behind competitors by Amazon (AMZN) and Apple (AAPL), causing a net loss more than twice as large as last year's. As a consequence, the company announced, it will stop making its own Nook color touchscreen tablets, finding a partner to take over that aspect of manufacturing (while continuing to make the basic, black-and-white display devices in house). "We know this is a sizable change from our existing strategy," CEO William Lynch conceded. The bookseller's stock sank more than 17 percent, to $15.61.
  • Carnival (CCL) rose almost 1.6 percent after naming a new CEO, board member Arnold Donald. Former chief executive Mickey Arison was ousted following a year of accidents and bad publicity.
Tomorrow brings first-quarter GDP at 8:30 a.m. ET. The consensus forecast is a growth rate of 2.4 percent, the same as the previous quarter's.

The Associated Press contributed to this report.


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thefacts22

Strong economic data? That is pure BS......Bernanke is still inflating the market

June 26 2013 at 4:45 AM Report abuse +1 rate up rate down Reply
h.hughjardon

Any chance this had more to do with the news from China than anything else?

June 25 2013 at 9:07 PM Report abuse -1 rate up rate down Reply