Stocks rose Friday after durable-goods orders unexpectedly rose -- even excluding transportation.
Durable-goods orders rose 0.8 percent in June, the Commerce Department reported. That was much better than the 0.3-percent drop economists had expected. Excluding transportation, orders rose 2 percent. A gauge of business spending increased 1.4 percent.
Robert Brusca of FAO Economics cautions not to "judge a book by its cover -- or a durable-goods report by its headline." He points out that, excluding defense, orders rose just 0.1 percent and declined for the prior two months.
Still, the durables report, delivered before the opening bell, snapped futures out of their morning meander that resulted from the disappointing housing report, which spurred concern that stocks won't be able to escape the claws of a bear market without the foundation of a solid housing market to build on.
Thursday's report showed existing-homes sales dropped again in June. Investors will be closing watching new home sales data when it's released at 10 am New York time to see just how bad the outlook is for home prices. Adding to the gloom surrounding the sector, home foreclosure filings rose 14 percent in the second quarter, according to real estate data firm RealtyTrac.
So, the question becomes: Which one will dominate the market going forward?
"I think we can kind of grind higher," Art Hogan, managing director at Jefferies, said on CNBC. However, "I think it’s going to be predicated on two things: We can’t have a major skeleton fall out of the closet on the financial side -– we can’t have a company come out that absolutely blows up the financial sector. And then the other piece is we need to have this benign to downward motion in crude pricing."
Washington Mutual shares skidded 10 percent, after an 8 percent jump in German trading after the savings-and-loan giant responded to an analyst note that said creditors are pulling funds from the company.
Meanwhile, members of Merrill Lynch's brokerage sales force might be poached by rivalMorgan Stanley as the Wall Street bank pushes on with a major recruitment drive.
And officials at Lehman Brothers have been mulling the sale of part or all of its Neuberger Berman asset management unit, sources told CNBC.