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U.S. shares close higher on housing data; Dow up 0.26%

Published 06/26/2012, 04:42 PM
Updated 06/26/2012, 04:44 PM
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Investing.com - U.S. stocks closed higher Tuesday, as better than expected housing data counteracted lackluster consumer confidence numbers and euro zone debt fears.

During early U.S. trade, the Dow Jones Industrial Average added 0.26%, the S&P 500 index rose 0.48%, while the Nasdaq Composite index climbed 0.63%.

Equity sentiment remained under pressure as the yield on Spanish 10-year bonds rose to 6.71% after three- and six-month bond auctions, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.

Meanwhile, Italy’s Treasury sold EUR2.99 billion worth of two-year bonds at an average yield of 4.71%, the highest since December.

Investor confidence also weakened after Moody’s ratings agency on Monday downgraded 28 Spanish banks, citing concerns over Madrid’s ability to support its banking sector, which the agency said was vulnerable to further losses from Spain's real-estate bust.

In the U.S., Standard & Poor’s with Case-Shiller said its house price index fell at an annualized rate of 1.9% in April from a year earlier, better than expectations for a 2.5% drop, but still declining for the 22nd consecutive month.

Media companies were in focus, as Rupert Murdoch’s News Corp rallied 6.51% after the Wall Street Journal reported that the company may split into two, cleaving its publishing arm from its far larger entertainment division.

Such a split would create a publishing business including The Wall Street Journal, The Times of London, The New York Post and the HarperCollins book-publishing business.

Meanwhile, Liberty Media gained 2.58% after a U.S. federal jury found on Monday that French entertainment group Vivendi must pay USD954.6 million in damages to the U.S. media group in a 2003 breach of contract lawsuit.

Also on the upside, social media giant Facebook surged 2.61%, after it named Chief Operating Officer Sheryl Sandberg as director on Monday, elevating the first woman to a board that comprises seven men. 

Elsewhere, financial stocks were broadly higher. JP Morgan saw shares jump 2.12%, after Goldman Sachs added the bank to its conviction buy list, while Citigroup advanced 0.86%, Bank of America climbed 0.79% and Goldman Sachs added 0.18%. 

In the tech sector, Microsoft shares advanced 1.21%, amid reports that the firm’s decade-long struggle against an EU anti-trust probe, that led to more than EUR1.68 billion in fines, is about to enter its final phase with a European court ruling.

The software company asked the EU General Court to void a EUR899 million fine imposed after Microsoft failed to comply with a 2004 antitrust order to provide rivals with data to help them work with the company’s operating-system software.

Other stocks in focus included manufacturing firm Robbins & Myers, due to report earnings later in the da

Hurting U.S. shares, data indicated that U.S. consumer confidence declined more-than-expected in June, falling to the lowest level since January.

The Conference Board said its index of consumer confidence fell to 62.0 in June from a downwardly revised reading of 64.4 last month and disappointing expectations for a reading of 63.5.

At the close of European trade, the EURO STOXX 50 slipped 0.12%, France’s CAC 40 gave back 0.30%, while Germany’s DAX 30 advanced 0.07%.

Investors are awaiting U.S. durable goods numbers, pending home sales and German cpi on Wednesday.



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