U.S. Durable Goods Orders Rise, Stocks Jump 1%

Nichole Harper
25 Jun, 2013
New York City

U.S. markets opened higher after durable goods orders increased at the fastest pace in six months and metropolitan home price rose more than expected in April. European markets jumped more than 1%.

[R]9:35 AM New York – U.S. markets opened higher after durable goods orders increased at the fastest pace in six months and metropolitan home price rose more than expected in April. European markets jumped more than 1%.[/R]

U.S. stocks rebounded after a sharp fall on Monday after durable goods orders increased the most in six months and home prices gained more than expected in April.

In early trading, the S&P 500 index increased 14.05 or 0.9% to 1,587.12 and the Nasdaw Composite Index gained 1% or 33.22 to 3,353.72.

Market sentiment in New York and in the euro zone was positive after China’s central bank said it plans to use all tools available to normalize money market and ease interbank liquidity in the world’s second largest economy.

Durable Orders Rise 3.6%

Durable goods orders increased more than expected 3.6% in May, the Commerce Department said today in Washington.

Excluding volatile transportation equipment, bookings increased slightly after rising 1.7% in April. Non-defense orders for capital goods excluding aircraft orders increased 1.1% after rising 1.2% in previous month.

S&P/Case-Shiller index, a measure of metropolitan home prices in 20 largest cities, increased 12.1% in April from a year ago month. The adjusted index from the previous month increased 1.7% in April.

The index was led by 23.9% surge in home prices in San Francisco followed by 22.3% gain in Las Vegas.

Asian Markets

Asian markets rebounded but closed mixed in the region and the Japanese yen hovered below 98 to a dollar and the Australian dollar traded at a low for the year and Indian rupee closed near record low.

Market indexes in Japan declined 0.7% and in Shanghai fell 0.9% after plunging 5% in yesterday’s trading to a 4-year low. Indexes in Hong Kong gained 0.2% after falling 2.2% on Monday.

European Markets

European markets traded higher after fears of Chinese money market meltdown subsided and investors adjusted to the U.S. Federal Reserve’s plan to unwind stimulus operation after five years.

In London, FTSE 100 index increased 1.1% to 6,093 and in Frankfurt the DAX index added 1.5% to 7,807.

In Paris, CAC 40 index gained 1.4% to 3,647 and market indexes in Switzerland, Italy and in Spain added nearly 1%.

Hungary’s central bank lowered its policy rate for the eleventh month in a row after holding rates steady for seven months.

Stocks in Review

Banks traded higher after market indexes rebounded.

Bank of America increased 1.1%, Citigroup added 1% and JPMorgan advanced 0.9%.

Lennar Corp ((LEN)) gained 5% after home builder reported second quarter sales of $1.43 billion and adjusted profit of 43 cents a share.

Netflix declined 2% after cautious comments from an analyst at Sanford C. Bernstein.

Valero Energy Corp increased 2% after positive comments from Goldman Sachs boosted the stock of independent refiner.

Walgreen ((WAG)) declined 6% after the largest drug store chain reported third quarter adjusted earnings of 85 cents a share. Revenues were also below analyst expectations.