U.S. stocks rose
It happened because of increasing speculation the Federal Reserve will raise interest rates this summer sparked gains in financial shares. Meanwhile, housing data signaled the economy is strengthening enough to support higher borrowing costs.
Banks surged as Treasury yields climbed toward a three-week high, with JPMorgan Chase & Co. and Citigroup Inc. rising at least 1.8 percent. Toll Brothers Inc. jumped the most in almost three years after stronger-than-forecast new-home sales and as the luxury builder’s quarterly profit topped estimates. An S&P index of homebuilders was on track for the steepest climb in more than two months.
The S&P 500 gained 1.2 percent to 2,071.58 at 10:32 a.m. in New York, after slipping 0.2 percent Monday in light volume. The gauge rose above its average price during the past 50 days for the first time in four days. The Dow Jones Industrial Average added 201.56 points, or 1.2 percent, to 17,694.49. The Nasdaq Composite Index increased 1.5 percent, on track for the most in five weeks. Trading in S&P 500 shares was in line with the 30-day average for this time of day.
Key weekly news
“This is the way these markets seem to run now with these quick reversals,” John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said by phone. “The first weeks of the year were the end of the world, and the story the next eight weeks was that there’s great promise on this Earth. Now, if the Fed is raising rates because the economy is doing better, that looks like a good thing and it seems the market is recognizing that. The jump today in new-home sales, it’s a volatile figure, but that’s a big deal.”
A report today showed April new-home sales surged to the highest level in more than eight years, pointing to a robust spring selling season for builders. The median sales price climbed to a record, reflecting a pickup in signed contracts for more expensive properties.
Traders are now pricing in a 36 chance of a rate increase in June, from 4 percent last Monday, as Fed officials signaled their willingness to make such a move if the economy shows sustained progress. Along with today’s April new-home sales report, investors will scrutinize releases on consumer sentiment and GDP later this week.
U.S. stocks rose the most in a week by Inna Rosputnia
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