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Stocks higher on housing but Europe worries linger - Yahoo Finance
NEW YORK (AP) -- Hopes that the U.S. housing market is starting to recover and the economy is on the mend sent stocks higher on Wall Street.
But the gains are being constricted from continuing worries that Greece's political deadlock could fracture the European Union and roil global markets.
The Dow Jones industrial average rose 75 points Wednesday to 12,707. The Standard & Poor's 500 added nine points to 1,340. The Nasdaq composite rose 15 points to 2,908.
Home builder stocks rose after the Commerce Department said builders started work on new homes at an annual pace of 717,000 last month, 2.6 percent more than in March. It was a heartening sign for the beleaguered housing market, which seems to be forming a bottom and starting to recover. Construction rose for both single-family homes and apartments.
Target Corp. rose after a strong earnings report. Target said revenue at stores opened at least a year rose 5.3 percent, the strongest performance in six years for that period. Target's results illustrate that Americans are beginning to spend cautiously as economic uncertainty persists. Though the job market is still shaky, falling gas prices have given shoppers hope.
As signs of a global economic slowdown persist, prices of commodities have come off highs. Oil prices continued their march downwards from $105 in the beginning of the month to $93. Crude oil prices were down $1 on Wednesday. Gold prices fell $18 to $1539, the lowest level since December.
In Europe, a potentially chaotic situation was developing in Greece, where power-sharing talks collapsed Tuesday and new elections were called for next month. There is already concern in other European countries about how a possible Greek exit from the euro would affect the rest of the continent.
On Wednesday, Spain's prime minister warned that the country, which is trembling under a 24.4 percent unemployment rate, could be locked out of international markets due to problems in the EU.
"Right now there is a serious risk that (investors) will not lend us money or they will do so at an astronomical rate," Mariano Rajoy told Spanish lawmakers.
Financial pressures extend well beyond Europe too. The Indian rupee hit a new all-time low against the dollar with investors increasingly seeking a safe place to put their money. The rupee sank to 54.44 against the dollar Wednesday, surpassing the prior low of 54.39 on December 15.
Among other stocks making big moves:
— JC Penney plunged 14 percent, the most in the S&P 500 index, after the retailer reported a bigger-than-expected first-quarter loss. Sales plummeted as shoppers are rejecting their new pricing plan.
— Abercrombie & Fitch fell 11 percent after reporting that its first-quarter net income shrank 88 percent because of higher costs and declining sales in established stores and in Europe.
— General Electric rose 3.6 percent, the most of the 30 stocks in the Dow, after the company said its finance unit will pay a special dividend of $4.5 billion to the parent company this year. It had suspended the payments in 2009 during a freeze in credit markets.
Asian Stocks Drop as Jobs Report Adds to Growth Concern - Bloomberg
Asian stocks fell after a U.S. payrolls report showed fewer jobs were added to the world’s largest economy than the most pessimistic forecast, adding to concern the global economy is slowing. Japan’s Topix Index is headed for its lowest closing level since 1983.
Sony Corp. (6758), a Japanese exporter of consumer electronics that gets about one fifth of its sales in the U.S., fell 1.5 percent. BHP Billiton Ltd. (BHP), the world’s biggest mining company, dropped 1.9 percent as metals prices declined. Those of Woodside Petroleum Ltd. (WPL), Australia’s second-largest oil producer, sank 2.2 percent as crude extended last week’s slump.
The MSCI Asia-Pacific Index dropped 1.4 percent to 109.83 as of 9:53 a.m. in Tokyo. The gauge tumbled 10 percent in May, the biggest monthly loss since October 2008, when global markets tumbled in the wake of the collapse of Lehman Brother Holdings Inc. Equities continued declines into June as the U.S. jobs report added to concern global growth is slowing and Europe’s debt crisis is worsening.
“The poor U.S. payrolls number should start to deflate investor optimism about U.S. growth that we’ve encountered, leaving few places for investors to hide,” said Gerard Minack, global developed-market strategist at Morgan Stanley in Sydney.
Japan’s Topix fell 2.1 percent, below the lowest level seen during the 2008-2009 financial crisis and headed for its lowest close since December 1983. The gauge has fallen more than 20 percent from this year’s high on March 27, entering a so-called bear market. The Nikkei 225 Stock Average dropped 2 percent.
U.S. Payrolls
In Seoul, the Kospi index dropped 2.3 percent and Australia’s S&P/ASX 200 Index slid 1.6 percent.
Futures on the Standard & Poor’s 500 Index lost 0.7 percent today. The index slumped 2.5 percent in New York on June 1 and the Dow Jones Industrial Average erased its 2012 gains after the jobs report.
U.S. payrolls climbed by 69,000 last month and the jobless rate rose to 8.2 percent. The Institute for Supply Management’s factory index fell after reaching a 10-month high.
China’s non-manufacturing industries expanded at the slowest pace in more than a year as export orders declined and weakness in real estate countered strength in retailing and leasing, an official survey indicated.
The purchasing managers’ index fell to 55.2 in May from 56.1 in April, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in statements yesterday in Beijing. That’s the lowest reading since March 2011 when the federation started seasonally adjusting the data.
The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. tumbled 3.4 percent to 87.22 on June 1 in New York, the biggest slump since Nov. 21.
The London Metal Exchange Index of prices for six industrial metals including copper and aluminum dropped 0.8 percent on June 1 and the Thomson Reuters/Jefferies CRB Index of raw materials slumped 1.7 percent.
Oil for July delivery opened 0.3 percent lower in electronic trading on the New York Mercantile Exchange after falling 8.4 percent last week to the lowest in eight months.
To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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