Wednesday’s Stock Market Open: US Equities Rise On Good Housing Data As Traders Seek To Extend 3-Day Rally

Update: 12:05 p.m. EDT:

U.S. stocks turned mixed in noon trading.

The Dow Jones Industrial Average slipped 10.46 points to 26,279.52, while the S&P 500 rose 2.79 points to 3,127.53 and the Nasdaq Composite Index climbed 55.97 points to 9,951.84.

In Europe markets finished higher, as Britain’s FTSE-100 edged up 0.17%, while France’s CAC-40 rose 0.88% and Germany’s DAX gained 0.54%.

Original story:

U.S. stocks rose on Wednesday on some fairly strong data suggesting the housing industry is recovering.

The Dow Jones Industrial Average gained 52.57 points to 26,342.55, while the S&P 500 rose 8.56 points to 3,133.30 and the Nasdaq Composite Index climbed 47.71 points to 9,943.58.

Housing starts in May gained by 4.3% month-over-month to 974,000, somewhat below expectations of 1.1 million. Builder permits jumped by 14.4% to a 1.22 million rate.

The Mortgage Bankers Association said applications to buy a home rose by 4% last week from the prior week and were 21% higher than one year ago. That marked the ninth straight week of gains.

“The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said MBA economist Joel Kan.

Stocks rallied on Tuesday on a record surge in May retail sales, a promising drug -- dexamethasone -- to treat covid-19 and reports that the Trump administration is planning a $1 trillion infrastructure bill.

“It’s hard to keep a ‘well supported’ stock market down,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “Against a backdrop of widespread caution… the stock market was simultaneously bombarded by major pillars of support.”

However, worries about the coronavirus persist, as China, Brazil and Iran reported a spike in infections. Beijing will reportedly close all schools due to a resurgence in coronavirus cases. More than 2.1 million cases have been confirmed in the U.S.

“The attitude of many Americans seems to be that they are done with the coronavirus, but the coronavirus is not done with us,” said Marc Odo, portfolio manager at Swan Global Investments. “The large run-up in the market was predicated upon everything going right and a return to normal in short order. However, the regional spikes in infections is challenging that optimism.”

“Global markets could remain stretched between a health situation likely to remain a threat in several regions for some time on the one hand, and a stream of positive macro figures confirming that we have passed the low point on the other,” said Xavier Chapard, a global macro strategist at Credit Agricole. “The Fed’s priorities are shifting from emergency actions aimed at preventing a market melt-down to long-lasting actions to support the fastest possible recovery in the real economy.”

Border skirmishes between India and China in the Himalayas intensified.

Federal Reserve Chairman Jerome Powell will deliver the second day of testimony to Congress, on Wednesday.

Overnight in Asia, markets finished mixed. The Shanghai Composite edged up 0.14%; Hong Kong’s Hang Seng gained 0.56%; while Japan’s Nikkei-225 slipped 0.56%.

In Europe markets traded higher, as Britain’s FTSE-100 rose 0.49%, while France’s CAC-40 jumped 1.04% and Germany’s DAX gained 0.57%.

Crude oil futures fell 1.3% at $37.88 per barrel, Brent crude slipped 0.85% at $40.61. Gold futures fell 0.44%.

The euro slipped 0.2% at $1.1242 while the pound sterling fell 0.25% at $1.2543.