MARKET SNAPSHOT: U.S. Stock Indexes Rise With Home Sales

Date : 05/22/2012 @ 12:09PM
Source : Dow Jones News
Stock : Best Buy Co., Inc. (BBY)
Quote : 50.64  0.11 (0.22%) @ 3:59PM

MARKET SNAPSHOT: U.S. Stock Indexes Rise With Home Sales

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By Kate Gibson, MarketWatch

U.S. stocks on Tuesday gained for a second day after an upbeat report on the housing market deflected concern about global economic growth.

"The housing data has to be considered good news because some kind of stabilization in housing would be an important positive or at least the removal of a big negative for the economy," said Ken Tower, a senior analyst at Quantitative Analysis Service.

The Dow Jones Industrial Average (DJI) rose 56.11 points, or 0.5%, to 12,560.59.

The S&P 500 Index (SPX) added 10.75 points, or 0.8%, to 1,326.74, with financials leading the gains among its 10 industry groups.

The Nasdaq Composite (RIXF) gained 17.17 points, or 0.6%, to 2,864.38.

After wavering, stock-index gains solidified after the National Association of Realtors reported sales of existing homes last month climbed for the first month in four, up 3.4% in April.

"The more housing improves -- we believe 'housing' bottomed in late 2010 -- the better equities will do. Looking back several years, the relationship has been unsurprisingly tight and we see no reason to think that the relationship will weaken going forward," Dan Greenhaus, chief global strategist at BTIG LLC, wrote in an emailed note

For every stock falling three gained on the New York Stock Exchange, where 249 million shares traded as of 11:35 a.m. Eastern.

Shares of Best Buy Co. Inc. (BBY) rose 3.2% after the consumer-electronics retailer reported a 25% drop in first-quarter profit but affirmed its 2012 profit outlook.

Facebook Inc. (FB) shares continued their slide amid a game of finger pointing over the social networking company's initial public offering on Friday.

But Towers thinks the hand-wringing could prove short-lived. "The IPO wasn't managed very well, but the problems are probably transitory. It doesn't effect the number of users and the amount of potential revenue."

Google Inc. (GOOG) stock "struggled a bit when it first went public," he added of the search engine, which closed just above $100 a share in its first day of trading in August 2004, and is lately trading above $600 a share.




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