Thursday, July 23, 2009

Report on Home Sales Gives Wall Street a Push

Some good news for the housing industry arrived today with the announcement that sales of previously occupied homes jumped 3.6 percent last month. According to the National Association of Realtors, “sales rose at a seasonally adjusted annual rate of 4.89 million last month, above the 4.84 million units analysts had been expecting. That further encouraged market hopes that housing, and in turn the overall economy, are recovering.”

Due to the good news on the housing front, the U.S. stock market also saw some improvements. According to the New York Times the down topped 9,000 today, the first time it has gone so high since January 2nd. I’ve included a clip of their story on the topic below.

The Dow Jones industrial average was up 148 points or 1.7 percent. The Dow last closed above 9,000 on Jan. 2. The index had been up 24 points ahead of the report. The Standard & Poor’s 500-stock index gained 16 points, or 1.7 percent, while the Nasdaq was 32 points, or 1.7 percent, higher.

Stocks had already been rising after another batch of generally positive earnings reports.

Earlier, the Ford Motor Company surprised the market with a second-quarter profit of $2.3 billion, due mainly to a huge gain for debt reduction, while the drug maker Wyeth, the cigarette maker Philip Morris International and the candy maker Hershey all raised their profit forecasts.

A report from UPS, however, was less upbeat. The world’s largest shipping carrier said its second-quarter profit plunged 49 percent as sales tumbled. The company also issued third-quarter guidance below analysts’ forecast.

Also on Thursday, the government reported a bigger-than-expected rise in new jobless claims, though the report was distorted by the timing of auto plant shutdowns.

The Labor Department said the number of new claims for unemployment benefits rose by 30,000 last week to a seasonally adjusted 554,000 — above analysts’ estimate of 550,000.

However, total unemployment benefit rolls fell to the lowest level since mid-April.

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