Strong Consumer Confidence Data Lift Stocks
FOX Business: The Power to Prosper
A much bigger-than-expected jump in consumer sentiment helped traders overcome weak durable goods and housing data, pushing stocks higher.
Today's Markets
As of 3:45 p.m. ET, the Dow Jones Industrial Average climbed 34.2 points, or 0.26%, to 13015, the S&P 500 rose 4.8 points, or 0.35%, to 1372 and Nasdaq Composite gained 19.8 points, or 0.67%, to 2986.
The Conference Board said its index of consumer attitudes increased to 70.8 in February from a revised 61.5 the month prior, zipping past estimates of a reading of 63. The reading was the highest since February 2011, while the "jobs hard to get" component came in at its lowest level since November 2008.
There were worries among economists that sentiment may have taken a hit as gasoline prices started to rise, but those fears have yet to come to fruition in the data.
Orders for long-lasting goods slid 4% in January on a month-to-month basis, the biggest fall in three years, the Commerce Department reported. Economists expected a much shallower drop of 1%. The drop may have been partially attributable to "the tendency for orders to decline in the first month of a quarter and rebound in later months, as companies firm up order books as the strength of demand becomes clearer," economists at Barclays Capital wrote in a note to clients following the report.
Echoing that sentiment, many economists said the sharp fall in January may be a blip as opposed to the start of a trend lower.
"The decline needs to be looked at in context of surprisingly strong increases in previous months, and the underlying trend remained one of robust growth," Markit chief economist Chris Williamson wrote in an e-mail.
The report is a lagging indicator, but it includes a wide variety of items, from heavy equipment, to computers, to refrigerators and figures directly into broader levels of economic growth for the first quarter of 2012.
The S&P/Case-Shiller composite index of 20 metropolitan areas shows home prices dropped 1.1% on a non-seasonally adjusted basis in December from November. Economists forecast a smaller 0.9% decline. Prices are off 4% from a previous year, also a bigger drop than the 3.6% that was expected.
The real estate market took a strong hit during the recession and has taken a long time to recover as prices have remained low, demand has remained weak and credit conditions are still tough.
On the European front, Standard & Poor's sliced Greece's long-term sovereign debt rating into "selective default" territory after the closing bell on Monday, following a warning from Fitch indicating it would make as similar move if an expected private debt exchange goes through. The announcement by S&P prompted the European Central Bank to cease taking Greek bonds as collateral for its monetary operations. However, the central bank said immediate liquidity needs by banks affected could be met using other emergency windows its opened, helping to numb the impact.
Traders are also paying close attention to the ECB's second round of three-year loans to European banks that is on tap for Wednesday. Many analysts have said the first installment was critical in staving off a credit crunch across Europe.
Meanwhile, Italian 10-year debt yields, which were a focus just months ago, fell to the lowest level since August on Tuesday. The euro climbed 0.42% to $1.3454, while the U.S. dollar dipped 0.3% against a basket of six world currencies that are tracked by the dollar index.
Energy markets were sharply to the downside, following a retreat in the last session. The benchmark crude oil contract traded in New York fell $2.01, or 1.9%, to $106.55 a barrel. Wholesale New York Harbor gasoline slipped 2.8% to $3.0401 a gallon.
In metals, gold gained $13.50, or 0.4%, to $1,788 a troy ounce. U.S. Treasury prices were lower, pushing yields higher. The 10-year note yields 1.934% from 1.929%.
Foreign Markets
European blue chips rose 0.27%, the English FTSE 100 gained 0.21% to 5928 and the German DAX climbed 0.56% to 6888.
In Asia, the Japanese Nikkei 225 jumped 0.92% to 9723 and the Chinese Hang Seng rallied 1.7% to 21569.