Housing leads Wall St rebound, Europe eyed
Housing shares led a rebound by US stocks on Tuesday after upbeat data on home prices, but the outlook was clouded by doubts about a summit on the European debt crisis this week.
Major US stock indexes recovered part of Monday's losses of more than 1%. However, an air of caution remained as Spanish borrowing costs jumped and US consumer confidence fell to its lowest in five months in June.
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"Certainly in the United States stocks are nicely priced, and for a long-term investor it is an attractive entry point, but then what about this macro risks hovering around the market? I think it's having a dampening effect," said John De Clue, regional investment director at US Bank Wealth Management in Minneapolis.
Spanish bond yields rose after demand at a bill sale fell despite significantly higher yields as hopes faded that the European Union summit later this week would produce game-changing crisis measures. Madrid formally asked on Monday for funds to bail out its banks in a move some see as a prelude for a full-blown bailout of the euro zone's fourth-largest economy.
The Dow Jones industrial average rose 62.10 points, or 0.50%, to 12,564.76. The S&P 500 Index gained 8.84 points, or 0.67% to 1,322.56. The Nasdaq Composite added 20.68 points, or 0.73%, to 2,856.84.
The PHLX housing index jumped 3.1% after S&P/Case Shiller data showed home prices in 20 metropolitan areas gained 0.7% on a seasonally adjusted basis, topping economists' expectations for a 0.4% gain.
Energy shares led gains on the S&P 500, boosted by a jump of more than 2% jump in Brent crude prices. A strike by Norwegian oil workers threatened to tighten North Sea crude supply.
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