The major stock index exchange traded funds (ETFs) rallied Tuesday as a spate of positive reported earnings and improved consumer confidence moved stocks higher across the board.
Wall Street rallied and the S&P 500 hit its highest level since June 2008 on Tuesday as a flood of positive corporate results added to increasing optimism about the economic growth outlook. Ford Motor Co (NYSE: F), 3M Co (NYSE: MMM) and United Parcel Services Inc (NYSE: UPS) were among the bellwether names to impress, continuing a string of better-than-expected results. 3M and UPS also raised their full-year profit outlooks, contributing to the bullish sentiment. “The very positive outlooks from today means things look very bright going forward,” said Peter Andersen, portfolio manager of the Boston-based Congress Asset Management. The three major U.S. stock indexes hit highs for the year, and the Nasdaq was at its highest since late 2007, erasing losses after a drop in February. But some caution remained a day before a press conference by U.S. Federal Reserve Chairman Ben Bernanke. The SPDR S&P 500 ETF (NYSEArca: SPY) finished almost a 1% higher on Tuesday.
Americans’ confidence in the economy grew in April as fears about the job market eased, outweighing the pain from rising prices at the gas pump. The increase comes after an unexpected drop in March. But the measure had risen for five consecutive months before that to hit a three-year high in February. The Conference Board said Tuesday the index rose to 65.4 from a revised 63.8 in March. Economists expected a smaller rise to 64.8, according to FactSet. The index is still far from the reading of 90 that indicates a healthy economy. It hasn’t approached that level since the recession began in December 2007, even though the recession officially ended in June 2009. Still, the index’s 40-point increase since its all-time low of 25.3 in February 2009 reflects how far the economy has come. The Direxion Daily Semiconductor Bull 3x Shares ETF (NYSEArca: SOXL) surged almost 5% today.
U.S. home prices fell in February for the seventh straight month, according to a closely followed index released Tuesday, with the beleaguered housing market approaching a double-dip recession. Home prices in 20 major U.S. cities declined 1.1% in February, according to the Case-Shiller home-price index released by Standard & Poor’s. Prices fell 3.3% year over year in February, compared with a 3.1% year-over-year drop in January. The 20-city index is slightly above its April 2009 trough, meaning that home prices have retreated almost completely from the gains they posted from May 2009 through June 2010. A drop below the April 2009 level would put housing in a double-dip downturn. From its peak, the index has declined 32.5%, S&P said. “There is very little, if any, good news about housing. Prices continue to weaken; trends in sales and construction is disappointing,” said David Blitzer, chairman of the index committee at Standard & Poor’s. The Direxion Daily Real Estate Bull 3x Shares ETF (NYSEArca: DRN) ended almost 3% higher on Tuesday.
Gregory A. Clay contributed to this article.
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