The markets charged upwards on Tuesday, bringing the S&P 500 just about two points shy of its record close of 1,565.15 despite a decline in home sales and worse than expected consumer confidence numbers. Buoying the markets was a strong increase in home prices and a strong increase in orders for durable goods.
At the close: DJIA: +0.77%, S&P 500: +0.78%, NASDAQ: +0.53%.
Here are three stories that helped move markets on Tuesday afternoon:
1) There’s no sure way to tell what the fallout from the closure of Cyprus’s second-largest bank will be, but word on the street is that it will be bad. Cypriot leaders and the Troika — a coalition of European Union finance minsters, the European Central Bank, and the International Monetary Fund, which are responsible for ensuring euro-zone economic stability — reached an eleventh-hour deal to close the bank over the weekend.
The country’s second largest bank, Laiki Bank, will be liquidated. Deposits over 100,000 euro will be transferred to a “bad bank” along with the bank’s portfolio of toxic assets, which include large amounts of Greek government bonds and nonperforming real estate loans. Shareholders of the bank will be wiped out, along with both senior and junior unsecured creditors. The large deposits will be frozen for the time being… (Read more.)
2) The S&P/Case-Shiller Home Price Indices showed that for the twelve months ended January 2013, home prices increased 7.3 percent in the 10-City Composite and 8.1 percent in the 20-City Composite. What’s more, 19 out of 20 cities showed acceleration in year-over-year returns, Detroit being the only city to grow at a slower rate than before. This is the highest year-over-year increase since the housing bubble burst.
Meanwhile, newly built homes sold at a seasonally adjusted rate of 411,000 in February. While this represents a decrease of 4.6 percent from January, new home sales still improved 12.3 percent from February of 2012. This dip should not be seen as overly concerning as new-home sales numbers can often be volatile from month to month, and in general, the market for new construction has grown this year. However, last month’s numbers did fall below analysts’ predictions for gains of 425,000… (Read more.)
3) The ICSC-Goldman Retail Chain Store Sales Index dropped unexpectedly by 1.7 percent on a week-over-week basis for the week ended March 23. For comparison, last week sales rose 1.4 percent. On an annual basis, the sales picture was only slightly better; the 1.7 percent weekly decline pushed the year-over-year rate to an increase of just one percent. This drop, from the previous week’s gain of 2.3 percent, brought the same-store sales index to its lowest level since the economic recovery began… (Read more.)
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