Investors pushed stocks to a second consecutive day of gains as a rise in oil prices and positive readings on the U.S. housing sector lifted sentiment ahead of a two-day European summit meeting. The Dow Jones Industrial Average tacked on 92.34 points, or 0.74%, to finish at 12627.01. The S&P 500 rose 11.86 points, or 0.90%, to 1331.85 and the Nasdaq Composite added 21.26 points, or 0.74%, to 2875.32.
Energy stocks drove the bulk of the gains, bolstered by a run-up in oil prices. The list of top S&P 500 performers Wednesday was dominated by energy names, with Cabot Oil & Gas, QEP Resources, WPX Energy, NRG Energy and Nabors Industries all surging 5.6% or more. Among blue-chips, Exxon Mobil gained 1% and Chevron advanced 1.6%. Despite the day’s increases, energy is the only one of the 10 S&P 500 sectors that is in negative territory for the year, off 6.8% from where it started 2012.
Financials, industrials and health-care stocks were also firm on a day of broad-based gains. J.P. Morgan Chase rose 3% and Bank of America added 2% to lead the Dow components. However, Facebook fell 2.6% as many analysts at banks that underwrote its initial public offering last month began coverage of the Menlo Park, Calif., social-networking operator. The research was largely expected to be bullish, but “hold” ratings outnumbered the “buy” ratings.
The broad market gains came after a report on pending home sales in May topped expectations to match the highest level of the year, the latest in a string of signs of the housing market’s recovery. Also helping were strong earnings from homebuilder Lennar, which projected a slow and steady recovery in the housing market. Lennar rose 4.8% amid a broad rally in homebuilder stocks that included KB Home, D.R. Horton and Hovnanian Enterprises.
Separately, a report showed U.S. durable goods orders posted their first gain in three months in May, suggesting that the U.S. manufacturing sector stabilized a bit after an early spring slowdown. The positive U.S. economic readings allowed investors to push stocks higher, even as expectations remain relatively modest for a summit of European leaders, scheduled for Thursday and Friday in Brussels. Investors, will be watching for subtle cues about leaders’ willingness to work together.
StockMarketNews Research Team