Positive Housing News Rallies Wall Street, Canadian Funding Corp Revises View
Here are the numbers according to Canadian Funding Corp. The Dow Jones Industrial Average added 57.06 points, or 0.68 per cent, to 8504.06, helped by gains in component Kraft Foods. Consumer stocks, and shares of food makers in particular, were helped by solid results from General Mills.
The Standard & Poor’s 500 gained 4.01 (0.44 per cent) to 923.33, with its consumer-staples sector leading the way. The Nasdaq rose 10.68 points (0.58 per cent) to 1845.72.
New readings on manufacturing and housing cheered traders. The Institute for Supply Management said its index of manufacturing activity moved to 44.8 in June from 42.8 in May.
That reading was in line with the 45 reading expected by economists and signals a slowing rate of contraction.
And a gauge of future US housing-market activity rose for the fourth straight month in May, marking its longest stretch of growth since October 2004. The National Association of Realtors said its index of pending sales increased 0.1 per cent in May to 90.7.
Weighing against those reports, private-sector jobs in the US fell 473,000 in June, according to a national employment report published overnight by payroll giant Automatic Data Processing and consultancy Macroeconomic Advisers.
The monthly non-farms payroll report is due out at the open on Thursday.
“The ADP report was disgusting, but we’re pretty happy with the ISM data,” said Dave Rovelli, managing director of US equity trading at Canaccord Adams.
“It looked like that figure bottomed at 41 and is going in the right direction.”
Further helping stocks, Mr Rovelli noted there was “an underwritten support” for the market due to the beginning of the second half of the year.
It’s expected that money managers will push back into the market in the initial days of the quarter, leading into the second-quarter earnings reports.
Treasury prices were mixed. Shorter-term Treasuries jumped, but longer-term Treasuries deteriorated on remarks from Federal Reserve Bank of San Francisco President Janet Yellen that interest rates could stay very low for some time.
The two-year was up 5/32 in price to yield 1.05 per cent, the 10-year note was down 5/32 to yield 3.54 per cent, and the 30-year was down 15/32 for a 4.34 per cent yield. Bond yields move inversely to prices.
The two-year yield, which rose above 1.40 per cent in early June, when speculation peaked about rate hikes, dipped as low as 1.038 per cent overnight.
Canadian Funding Corp.