NEW YORK — A rebound in consumer confidence and more healing in the housing industry have put stocks back on an upward path.
Banks, retailers and home builders were Tuesday's biggest winners, helping to lift the major indexes about 0.3 percent. Energy and utility stocks fell sharply as oil prices cooled after a recent surge.
Though investors were pleased by better-than-expected readings on consumers and housing, trading was choppy as it has been over the past week. Despite improving economic data, the market is still generally cautious.
After a 52 percent climb in the S&P 500 since early March, investors are questioning how much further stocks have to go, especially in the absence of data showing actual growth in the economy.
"The upward trend has still not broken," said Brian Daley, sales trader at Conifer Securities. "It's too dangerous to fight the trend in the market, even though clearly a lot of people are nervous that it's too extended."
Stocks rose after the Conference Board said its Consumer Confidence index jumped to 54.1 this month from an upwardly revised 47.4 in July. That was far above the 47.5 reading analysts expected. Still, the report is a long way from showing that consumers are actually feeling optimistic about the economy amid ongoing worries about job losses. But it suggests Americans' pessimism about the economy is abating.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index rose 1.4 percent in the second quarter from the January-March period, the first quarterly increase in three years. Home prices, while still down almost 15 percent from last year, are at levels last seen in early 2003.
Stocks also got a boost from President Barack Obama's reappointment of Ben Bernanke as Federal Reserve chairman. Bernanke's reappointment, though expected, came sooner than anticipated and removed any uncertainty about a potential replacement.
The Dow rose 30.01, or 0.3 percent, to 9,539.29. The Standard & Poor's 500 index rose2.43, or 0.2 percent, to 1,028.00, while the Nasdaq composite index rose 6.25, or 0.3 percent, to 2,024.23.
About two stocks rose for every one that fell on the New York Stock Exchange, where volume was 1.14 billion shares.
In other trading, the Russell 2000 index of smaller companies rose 2.98, or 0.5 percent, to 583.22.
Analysts expect the market to be volatile through at least the end of the summer, especially with volume and news flow fairly light, as is typical of trading in August.
Home builders posted some of the biggest gains Tuesday after the home price data. Hovnanian Enterprises Inc. jumped 6.5 percent, adding 28 cents to $4.57, while Lennar Corp. rose 40 cents, or 2.8 percent, to $14.97.
Bond prices rose from earlier lows and moved slightly higher after an auction of $42 billion in two-year notes was met with adequate demand. The yield on the benchmark 10-year Treasury note fell to 3.44 percent from 3.48 percent late Monday. The yield on the two-year note slipped to 1.02 percent from 1.03 percent.
The dollar mostly fell against other major currencies, while gold prices rose.
Business, Pages 26 on 08/26/2009