Dow hits new record on strong economic data
Trader Gregory Rowe on the floor of the New York Stock Exchange Tuesday, May 28, 2013. The Dow closed at a new all-time high Tuesday after strong gains in US home prices and consumer confidence boosted stocks. AP PHOTO/RICHARD DREW
NEW YORK—The Dow closed at a new all-time high Tuesday after strong gains in US home prices and consumer confidence boosted stocks.
The Dow Jones Industrial Average was up 106.29 (0.69 percent) at 15,409.39, a new all-time high.
The S&P 500 put on 10.46 (0.63 percent) at 1,660.06, while the Nasdaq Composite Index added 29.74 (0.86 percent) at 3,488.89.
The widely watched S&P/Case-Shiller index of US home prices showed the price of a home in the 20 largest cities rose 10.9 percent in the year to March, the largest year-on-year increase since 2006.
Consumer confidence in the US surged to 76.2 in May, up from 69.0 in April, hitting the highest level since February 2008.
Stocks were also boosted by greater confidence that the Federal Reserve would maintain its bond-buying program and relief that Japan’s stock market rose Tuesday, said Art Hogan of Lazard Capital Markets.
“It’s a great way to start the week,” Hogan said, after markets were closed Monday for a public holiday. “We’re going to need a string of good data, not just two points” before stocks go significantly higher, he added.
Utility firm Exelon sank 7.5 percent after Deutsche Bank downgraded it to “hold” amid expectations for lower power prices from surging supply.
Similarly, FirstEnergy plummeted 6.5 percent after Credit Suisse downgraded the firm, citing an electricity auction that exposed an industry with “poor discipline by incumbent generators” and “crushing” new capacity that will “inevitably leave energy and capacity prices weak.”
Other utilities also fell, but not as steeply. NRG gave up 3.7 percent, American Electric Power dropped 2.4 percent, Duke Energy retreated 1.6 percent and PPL Corp. dipped 1.7 percent.
Video and live-streaming company Netflix gave up 6.4 percent after the return of the “Arrested Development” show garnered mixed reviews.
Luxury jeweler Tiffany jumped 4.0 percent after reporting 70 cents per share in earnings, well above the 52 cents forecast.
Bond prices fell sharply. The yield on the 10-year US Treasury rose to 2.14 percent from 2.01 percent late Friday, while the 30-year jumped to 3.29 percent from 3.17 percent. Bond prices move inversely to yields.
