Stocks eke out new highs
The Dow just manages to stretch its win streak to 7 sessions in a choppy day. New home sales rise more than expected.
NEW YORK (CNNMoney.com) -- Stocks struggled Wednesday, as investors welcomed positive reports on housing and durables goods, but remained on the sidelines after pushing the market to 2009 highs in the previous session.
The Dow Jones industrial average (INDU) added 4 points or less than 0.1%, still managing to close at its highest point since Nov. 4.
The S&P 500 (SPX) index ended just above unchanged, squeaking out its highest close since Oct. 6. The Nasdaq composite (COMP) also ended just above unchanged, ending at its highest point since Oct. 1.
The Dow has now gained for seven consecutive sessions, topping off a strong summer rally.
After such a run, stocks were vulnerable to some choppiness Wednesday, despite the encouraging reading on new home sales.
"This was a very positive report for the housing market," said Jane Caron, chief economic strategist at Dwight Asset Management. "It confirms that housing has turned the corner."
She said that a bottoming in housing is one of the reasons she is expecting solid third-quarter GDP growth. Growth will also be driven by inventory rebuilding across many sectors, she said, and a rebound in auto production in the aftermath of the government's Cash for Clunkers stimulus program.
Stocks have been more or less on the rise since bottoming in March. After hitting a more than 12-year low on March 9, the S&P 500 has risen 52%. The only notable pullback was a 7% slide in the run up to the start of the second-quarter earnings period.
Thursday preview: A revised reading on GDP in the last quarter is due before the start of trading. The weekly jobless claims report is also on tap.
Second-quarter gross domestic product growth (GDP) is expected to have contracted at a 1.5% annualized rate, according to a consensus of economists surveyed by Briefing.com. That would be steeper than the initially reported 1% rate, but not as sharp as the 6.4% decline reported in the first quarter. The Commerce Department released the GDP report.
The number of Americans filing new claims for unemployment is expected to have risen to 580,000 from 576,000 in the previous week. The Labor Department releases the jobs report.
Toll Brothers (TOL) reports quarterly results in the morning. The luxury homebuilder is expected to have lost $1.79 per share after losing 18 cents one year earlier.
Housing: July new home sales rose to a 433,000 unit annualized rate from a revised 395,000 unit rate in June. Economists surveyed by Briefing.com forecast sales at a 390,000 unit annual rate.
On Tuesday, an S&P/CaseShiller report showed that home prices rose 2.9% in the second quarter versus the first, the first quarterly rise in three years.
Also on Tuesday, reports showed consumer confidence and housing are starting to recover -- and President Obama nominated Ben Bernanke for a second term as chairman of the Federal Reserve.
Durable goods orders: Orders for goods meant to last three years or longer rose more than expected in July. According to a Commerce Department report released Wednesday morning, durables rose 4.9% after falling a revised 1.3% in June. Economists thought orders would rise 3.2%.
Oil prices: Light crude oil prices for October delivery fell 62 cents to settle at $71.43 a barrel on the New York Mercantile Exchange. Prices fell after a government report showed crude supplies rose less than expected last week, while gas and distillates - used in heating oil - rose more than expected.
On the move: Vonage Holdings (VG) jumped 36% in unusually active New York Stock Exchange trade, building on its recent gain. The provider of VoIP - Internet based calling - has seen its stock bounce over 300% in the last week on speculation that the company can stay afloat, despite weaker revenue and subscriber growth.
Human Genome (HGSI) also moved on unusually high volume on speculation that the company could be bought out by GlaxoSmithKline, its partner on several drugs, according to published reports.
Market breadth was mixed. On the New York Stock Exchange, losers topped winners by a narrow margin on volume of 1.05 billion shares. On the Nasdaq, advancers beat decliners seven to six on volume of 2.08 billion shares.
World markets: European markets tumbled in afternoon trading, while Asian markets mostly ended higher, with the Japanese Nikkei rising 1.4%.
Bonds: Treasury prices were little changed, with the yield on the benchmark 10-year note ending at 3.43%. Treasury prices and yields move in opposite directions.
Treasury sold $42 billion of 2-year notes Tuesday and is planning to sell $39 billion of five-year notes Wednesday and $28 billion of 7-year notes Thursday.
Other markets: COMEX gold for December delivery fell 20 cents to settle at $945.80 an ounce.
In currency trading, the dollar rose versus the euro and fell versus the Japanese yen.
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