US close: Stocks gain on oil price rise, strong housing data
US stocks finished higher on Tuesday as oil prices rose and data showed new house sales surged more than expected in April.
The Dow Jones Industrial Average increased 1.22%, the S&P 500 climbed 1.37% and the Nasdaq gained 2.0%.
At the same time oil prices increased with West Texas Intermediate crude up 1.4% to $48.81 per barrel and Brent up 0.90% to $48.79 per barrel at 2142 BST.
Sales of new US single-family homes rose to their highest level since 2008 in April, official data released on Tuesday showed. According to figures from the Commerce Department, new home sales jumped 16.6% from the upwardly-revised March rate of 531,000 to a seasonally-adjusted annual rate of 619,000. Economists had been expecting a pace of 523,000.
Compared to the same month a year ago, sales were 23.8% higher.
On the downside, the Richmond Fed manufacturing index fell to -1 for May from 14 the previous month, worse than analysts’ estimates for a drop to 8.
Meanwhile, the prospect of an interest rate hike by the Federal Reserve in June boosted financial stocks. An increase in interest rates supports banks’ profits as it widens the gap between what banks charge on loans and what they pay for deposits.
Speculation on a rate rise next month has been fuelled by recent hawkish remarks from Fed speakers and last week’s Federal Open Market Committee minute minutes showing such a move is on the table.
Societe Generale strategist Kit Juckes said: “The odds of a June Fed rate hike have risen to 30% according to Bloomberg, but the vast majority of people I speak to think the UK’s EU membership referendum will be enough to stay the Fed’s hand.
“For those tempted to look for an early move, July is the favourite, and the odds there, have increased to above 50%. I should add that SG’s US economics team doesn’t share that view, expecting a Q4 move, but the contrast with the UK where the chances of a July hike (pot-referendum, remember) remain firmly at zero.”
On the corporate front, Toll Brothers gained after reporting better-than-expected second-quarter profit and revenue ahead of the open.
Best Buy slumped as it announced the departure of its chief financial officer and warned that earnings in the second quarter would hit by a disruption in supply of some high-margin products after an earthquake in Japan.
In currencies, the dollar rose 0.71% against the euro and grew 0.67% against the yen but fell 1.01% versus the pound.
S&P 500 - Risers
Chesapeake Energy Corp. (CHK) $4.05 +10.35%
Xilinx Inc. (XLNX) $47.45 +5.70%
PulteGroup Inc. (PHM) $18.73 +5.11%
Vertex Pharmaceuticals Inc. (VRTX) $88.42 +4.74%
Robert Half International Inc. (RHI) $40.80 +4.56%
Western Digital Corp. (WDC) $42.28 +4.50%
Whirlpool Corp. (WHR) $174.25 +4.42%
Moody's Corp. (MCO) $97.80 +4.36%
D. R. Horton Inc. (DHI) $30.48 +4.24%
Frontier Communications Co. (FTR) $5.09 +4.09%
S&P 500 - Fallers
CF Industries Holdings Inc. (CF) $27.61 -7.50%
Best Buy Co. Inc. (BBY) $30.55 -7.42%
Newmont Mining Corp. (NEM) $31.74 -6.18%
Anthem Inc (ANTM) $128.48 -3.53%
Norfolk Southern Corp. (NSC) $82.23 -2.90%
Freeport-McMoRan Inc (FCX) $11.11 -2.37%
Baker Hughes Inc. (BHI) $43.96 -2.07%
Signet Jewelers Ltd (SIG) $105.78 -2.01%
United States Steel Corp. (X) $13.55 -1.95%
Gap Inc. (GPS) $18.09 -1.74%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $51.59 +3.12%
Visa Inc. (V) $79.38 +2.81%
Intel Corp. (INTC) $31.06 +2.75%
American Express Co. (AXP) $64.87 +2.01%
Cisco Systems Inc. (CSCO) $28.47 +1.90%
Travelers Company Inc. (TRV) $113.44 +1.84%
JP Morgan Chase & Co. (JPM) $64.54 +1.70%
Unitedhealth Group Inc. (UNH) $132.59 +1.66%
Apple Inc. (AAPL) $97.90 +1.52%
3M Co. (MMM) $168.63 +1.52%
Dow Jones I.A - Fallers
Boeing Co. (BA) $127.50 -0.06%
Nasdaq 100 - Risers
Ctrip.Com International Ltd. Ads (CTRP) $45.42 +6.52%
Xilinx Inc. (XLNX) $47.45 +5.70%
Vertex Pharmaceuticals Inc. (VRTX) $88.42 +4.74%
Western Digital Corp. (WDC) $42.28 +4.50%
JD.com, Inc. (JD) $23.79 +3.93%
Baidu Inc. (BIDU) $175.88 +3.60%
Gilead Sciences Inc. (GILD) $86.22 +3.47%
Activision Blizzard Inc. (ATVI) $39.02 +3.42%
Viacom Inc. Class B (VIAB) $41.30 +3.38%
Linear Technology Corp. (LLTC) $46.99 +3.25%
Nasdaq 100 - Fallers
TripAdvisor Inc. (TRIP) $66.07 -1.20%