Market up on consumer data, energy companies gain
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Tue, 26 Aug 2008 15:03:20 GMT |
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Reuters |
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US (Business) |
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NEW YORK (Reuters) - Stocks edged higher in thin volume on Tuesday, as energy companies gained on a $2 jump in the price of oil and data showed U.S. consumer confidence rose far more than expected in August as worries about inflation eased.But housing data was mixed. Sales of newly constructed U.S. single-family homes in July were lower than economists expected, a government report showed, but rose from a June pace that was the slowest in nearly 17 years.Energy companies led the S&P 500 higher as oil rose on concerns about possible disruption to U.S. offshore oil and gas output from a strengthening Hurricane Gustav. Shares of Anadarko Petroleum jumped 6 percent after the company announced an up to $5 billion share repurchase program.Financial companies which had fallen sharply on Monday on credit fears also bounced back, helping to support the market."It's fair to say two things: the economic data calendar gave us a mixed message today on balance, and the market may well be moving more on the fact that oil's up $2.50," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.The Dow Jones industrial average <.DJI> rose 31.83 points, or 0.28 percent, to 11,418.08, while the Standard & Poor's 500 Index <.SPX> gained 6.99 points, or 0.55 percent, to 1,273.83. The Nasdaq Composite Index <.IXIC> was up 7.36 points, or 0.31 percent, at 2,372.95.Before the market opened, the Standard & Poor's/Case Shiller national home price index showed prices of U.S. single family homes fell at a record pace in June, but the monthlyrate of decline slowed from May, suggesting the decimated housing sector may be stabilizing.On the Nasdaq, Marvell Technology Group shares fell 5.7 percent, after Jefferies & Co downgraded the company's stock on concerns about the microchip design company's hard disk drive inventory and its weak cellular positioning.Energy companies, including Exxon Mobil rose with the price of oil. Exxon Mobil was the biggest boost to the S&P 500, rising 1.1 percent to $79.55. .While the gain in the price of oil boosted energy shares, it weighed on companies particularly sensitive to higher fuel costs, such as airlines. An index of airline stocks <.XAL>slipped 0.5 percent.Embattled mortgage finance giants Fannie Mae and Freddie Mac shares soared on speculation any rescue would not wipe out shareholder value."I think there's a lot of speculation that maybe the shareholders will get bailed out. So shareholders think, 'If I buy this at $3 to $5 a share and the shareholders get bailed out, I'm going to do great.' They are certainly not doing it on the basis of fundamentals," said Mark Coffelt, chief investment officer at Texas Capital Value Funds in Austin, Texas,Fannie's shares rose 18 percent to $6.12 and Freddie's shares jumped 25.8 percent to $4.14.An index of financial companies <.BKX> rose 1.4 percent.(Editing by Kenneth Barry)
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