Wall Street posts modest gains

Published: 2009/08/26

NEW YORK: US stocks rose modestly to new year highs Tuesday, lifted by strong consumer confidence and home prices data and Federal Reserve chief Ben Bernanke’s nomination to serve a second term.The Dow Jones Industrial Average climbed 30.01 points (0.32 per cent) to finish at 9,539.29, its highest level of the year.

The tech-heavy Nasdaq composite increased 6.25 points (0.31 per cent) to 2,024.23 and the Standard & Poor’s 500 index, a broad measure of the market, advanced 2.43 points (0.24 per cent) to 1,028.00.Trading seesawed under pressure from a sharp plunge in crude oil prices that pulled heavyweight oil stocks lower.

Opening with modest gains, the major indices briefly shot higher in the morning after the Conference Board reported its consumer confidence index rebounded to 54.1 points in August, well above analyst forecasts and snapping two months of declines.Also lifting sentiment was the S&P/Case-Shiller housing price index, which showed price declines in 20 cities slowed to an annual decline of 15.4 per cent in June from a 17.1 per cent drop in May.

“The Case-Shiller home price report showed the battered sector could finally be bottoming,” Charles Schwab & Co. analysts said in a client note.Joel Naroff of Naroff Economic Advisors said both reports could suggest a positive impact on recovery from recession.“An improving housing market coupled with better consumer spending could ensure that the recovery takes hold. That is likely the reading that investors will take away from both these reports,” he said.

Before the market opened, President Barack Obama nominated Bernanke for a second four-year term, citing his skill in maneuvering the recession-mired economy toward recovery. The Senate is expected to confirm the nomination.“By renominating Bernanke well before his term expires in January, Obama eliminates any uncertainty in financial markets about the leadership at the Fed,” said Ryan Sweet of Moody’s Economy.com.

Keeping Bernanke at the helm of the Fed will “increase the likelihood that the central bank will successfully exit from its massive intrusion in financial markets,” he said.Sentiment soured after crude oil prices closed sharply lower after hitting 10-month highs in New York. -- AFP