U.S. Stocks Trim Gains; Confidence and Home Price Indexes Fall

Nichole Harper
27 Mar, 2012
New York City

Stocks in New York pared gains after consumer confidence edged lower in March and metropolitan home prices fell in January. European leaders appear to be ready to expand the bailout fund and markets in Japan jumped to the pre-disaster level last year.

[R]11:05 AM New York – Stocks in New York pared gains after consumer confidence edged lower in March and metropolitan home prices fell in January. European leaders appear to be ready to expand the bailout fund and markets in Japan jumped to the pre-disaster level last year.[/R]

U.S. stocks pared early gains after the release of consumer confidence index and home price index.

The controversial Case-Shiller index of 10 major metropolitan areas declined 0.8% and the index tracking 20 cities fell by the same amount in January from December. The index of 20 cities declined 3.8% from a year ago.

Consumer confidence index tracked by the Conference Board dropped to 70.2 from a revised 71.6 in February as employers added the most jobs in the last six months since 2006.

The sentiment held up near the one-year high despite the record gasoline prices at pump stations in last ten months as more people find jobs. The retail price of gasoline jumped to $3.90 a gallon as of yesterday according to the American Automobile Association.

European indexes pared gains and looked ahead to a meeting of finance ministers scheduled to determine the size and structure of two bailout funds.

The mood in the market improved after German Chancellor Angela Merkel said at a news conference in Berlin today that her government is prepared to consider temporary rescue fund and permanent rescue funds run in parallel, effectively increasing the size of total bailout capital.

She added that permanent bailout will be capped at €500 billion but the temporary fund will be allowed to be in existence till the borrowing nations repay. This will allow the total available capital for bailout to increase to €690 billion.

Asian markets surged following the yesterday’s gains in New York after positive comments from the Fed Chairman Ben Bernanke lifted market sentiment.

The Nikkei index in Tokyo surged the most in six months and closed above the pre-March 11 level for the first time in a year.

Market indexes in India soared 1.2% and in Hong Kong jumped 1.8%.