3 Reasons Markets Were Up on Stronger Real Estate Pricing
Markets closed up on Wall Street today: Dow +0.18%, S&P +0.23%, Nasdaq +0.55%, Oil +1.73%, Gold +2.73%.
On the commodities front, Oil (NYSE:USO) climbed to $88.78 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,840.50 an ounce and Silver (NYSE:SLV) climbing 2.23% to $41.51 an ounce.
Today’s markets were up because:
1) Consumer confidence. Markets were headed down this morning after the Conference Board announced that its consumer-confidence index declined to its lowest level since April 2009 in its sixth-largest one-month decline in the last 21 years. The news follows Friday’s release of the Thomson Reuters/University of Michigan consumer-confidence index, which had confidence declining in August to its lowest level since November 2008. However, while markets started rocky, they eventually turned upward on more positive news and closed the day with modest gains.
2) Fed minutes. Stocks climbed to late-afternoon highs after the Fed released minutes from its latest policy meeting, in which they discussed range of economic stimulus measures, including another round of quantitative easing. The minutes also showed that Fed officials pushed for a longer meeting in September to further discuss the measures, echoing Chairman Ben Bernanke’s announcement Friday that the one-day meeting would be stretched to two days when he spoke from an annual economic conference in Jackson Hole, Wyoming. While the fact that the Fed committee is considering another stimulus is evidence the economy is doing poorly, it gives some comfort to know the Fed may soon take actions to spur growth.
3) Home prices. S&P/Case-Shiller released their quarterly Home Price Index this morning, which covers April 2011 through June 2011, and shows significant growth in the second quarter, after home prices in the real estate market (NYSE:IYR) declined steeply in the first quarter. While housing prices have recovered from their first-quarter low, they remain below second-quarter prices in 2010. But the fact of their having climbed for three straight months to finish the quarter up 3.6% above where they finished the first quarter shows that the housing market was slowly but steadily recovering. The news had housing-related stocks climbing today. Beazer Homes USA (NYSE:BZH) was the capital goods sector’s leading gainer, climbing 11.17%, while BlueLinx Holdings Inc. (NYSE:BXC) was the second-best sector performer today, as the building products distributor’s stock climbed 10.26%. Other stocks getting a boost from the news include Hovnanian Enterprises (NYSE:HOV), KB Home (NYSE:KBH), M.D.C. Holdings (NYSE:MDC), and NVR Inc. (NYSE:NVR).