Wall Street Opens Higher

Stocks rose solidly on Tuesday, partially recovering from recent steep declines as strong data pointed to improvements in the economy.

In afternoon trading the S.P. 500 was 0.9 percent higher, the Dow Jones industrial average gained 0.7 percent and the Nasdaq composite added 0.6 percent.

Equities were volatile for much of the session, as the data initially raised concerns about central bank stimulus, but analysts said a rebound was due coming off a large drop in Monday’s session, which itself followed the worst week for the S.P. 500 since April.

“Everyone panicked after the Fed, but the fear is starting to come out of the system now. Investors are realizing that the Fed is still a long way from raising rates,” said Mark Foster, who helps manage $600 million at Kirr Marbach Co. in Columbus, Indiana.

The recent downturn in markets started after the Federal Reserve chairman, Ben S. Bernanke, said last week that the Fed’s stimulus program may be scaled back this year if the economy improves, placing traders in a paradoxical situation where good data could indicate less stimulus, which would in turn be a threat to growth.

Economic reports topped analysts’ expectation. The Commerce Department said durable goods orders increased 3.6 percent in May, above the 3 percent forecast, the latest signs of a pickup in economic activity. Also, the S.P. Case Shiller composite index of house prices in 20 metropolitan areas gained 1.7 percent on a seasonally adjusted basis, topping forecasts for 1.2 percent, indicating the housing recovery continues to gain momentum.

Finally, consumer confidence jumped in June to its highest level in over five years, as Americans said they were more optimistic about business and labor market conditions, according to the Conference Board, an industry group.

Housing stocks were among the strongest of the day, surging on the data as well as because Lennar Corporation, the No. 3 homebuilder, posted strong results and the company pointed to a “solid housing recovery.” The stock rose 1.6 percent, while another homebuilder, PulteGroup Inc was up 4.1 percent.

Walgreen fell 7 percent after reporting weaker-than-expected results, citing slow front-end sales and a challenging economy.

Barnes Noble, the bookstore chain, slumped 19.6 percent after it reported its quarterly net loss more than doubled.

Asian markets had a day of wild swings, during which Chinese stocks plunged to their lowest since the global financial crisis, ending with a late rally on hopes authorities would step in to prevent a crisis.

“China’s new leaders are determined to address the financial risks that have built in the financial system because of excessive lending,” said Koen De Leus, senior economist at KBC.

In Europe the broad FTSEurofirst 300 index ended the day up 1.5 percent, recovering some of the 5.5 percent lost in the previous three trading days.

“After all the moves we’ve seen in U.S. dollar buying, selling bonds, selling equities, I think we’re going into a consolidation period,” said Greg Matwejev, director of FX Hedge Fund Sales and Trading at Newedge.

Article source: http://www.nytimes.com/2013/06/26/business/daily-stock-market-activity.html?partner=rss&emc=rss