Housing Goes Up, Oil Down, Pushing Dow to Five-Week High
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Wednesday, April 4, 2007
NEW YORK, April 3 -- Stocks surged Tuesday, with the Dow Jones industrials closing at a five-week high, as the housing market showed new-found vigor and oil prices fell to bolster investors' confidence in the economy.
The Dow rose 128 points, to 12,510.30. It was the Dow's highest close since Feb. 26, the day before it plunged 416 points. The Dow is now back in positive territory for the year and 276 points below its record close of 12,786.64 on Feb. 20.
Broader stock indicators also soared, with the Standard & Poor's 500-stock index up 13.22, to 1437.77, and the Nasdaq composite index up 28.07, to 2450.33.
The National Association of Realtors index for pending sales of existing homes rose in February at a seasonally adjusted annual rate of 0.7 percent. Although the index is below where it was a year ago, the result was stronger than investors expected and reassured them that the housing sector, while weak, is not being battered by the struggling lenders of subprime mortgages.
Other data Tuesday also suggested the American consumer is strong: A report from Redbook Research showed consumers spent more at chain stores in March than they did in February.
A decline in crude oil prices as tensions eased between Britain and Iran also encouraged investors. High energy prices contribute to inflation, which can crimp spending and hurt the chance of lower interest rates. Light sweet crude closed at $64.64 a barrel, down $1.30 on the New York Mercantile Exchange.
Movers
General Motors rose 64 cents, to $31.47. GM and its joint-venture partner, Shanghai General Motors, said first-quarter combined sales in China rose 25 percent.
Continental Airlines rose $3.07, to $39.12, on stronger-than-expected revenue growth.
Napster rose 15 cents, to $4.30. The online music subscription service's 40,000 new subscribers would help it surpass its fiscal fourth-quarter revenue guidance.
Cell Genesys rose $1.39, to $5.70. The drug developer said clinical trial data showed that prostate cancer patients using the company's GVAX treatment survived longer than patients in a previous study.
