Stocks Recover After Home-Sales Report
Stocks rebounded from a lower open Wednesday after a sharp jump in new-home sales.
New-home sales shot up 9.6 percent to a 433,000 annual pace in July, after a 9.1-percent increase in June. The number blew past economists' expectation for a 1.6-percent increase.
Homebuilder stocks soared, with Hovnanian up more than 10 percent and Beazer Homes up more than 5 percent.
This report came after a morning report showed mortgage applications jumped 7.5 percent and Tuesday's report that home prices rose 1.4 percentin June from May.
The morning's other big economic news was orders for durable goods, which are big-ticket items such as cars and appliances. Durable-goods orders posted their largest jump in two years but the rise was mainly fueled by the volatile transportation sector. Excluding transportation, orders rose 0.8 percent, just shy of the 0.9-percent expected.
Excluding transportation goods, orders rose 0.8 percent. That was the third straight increase, but just below analysts' expectations of a 0.9 percent rise.
Across the pond, German business confidence jumped to its highest since last September, according to the Ifo business-climate index.
The morning began with news of Senator Ted Kennedy's death at age 77. Kennedy died after a long battle with a brain tumor, having served in the Senate since 1962, making him the third longest serving senator in history.
Kennedy was considered one of President Obama's major allies in his health-care reform initiative, and the President issued a statement saying he and First Lady Michelle Obama were "heartbroken" to learn of Kennedy's death.
Financials opened lower, including Bank of America and Citigroup and AIG .
Fannie Mae and Freddie Mac continued to rally.
In August's quiet trading, Bank of America, Citi, Fannie and Freddie have accounting for an extraordinary amount of volume, which traders have dubbed a "dash for trash."
At 10:30 am New York time, the Energy Department will be out with its weekly read on oil inventories.
The Treasury will auction $39 billion in 5-year notes with results available shortly after 1 pm New York time. The Treasury sold $42 billion in 2-year notes yesterday, which was met with mediocre demand, and will follow up tomorrow by selling $28 billion in 7-year notes.
Toyota will cut production in response to slumping sales, with cuts possibly reaching 700,000 vehicles, or about 7 percent of the company's global production capacity.
— Peter Schacknow contributed to this report.
Still to Come:
WEDNESDAY: Bailout executive-pay report; weekly crude inventories; five-year auction; Fed's Lockhart speaks
THURSDAY: 2nd reading on Q2 GDP; weekly jobless claims; Kansas City Fed report; Fed's Bullard speaks; seven-year auction; earnings from American Eagle, Toll Brothers and Dell
FRIDAY: Personal income and spending; consumer sentiment; Earnings from Tiffany
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