Markets ended higher on Tuesday after better-than-expected consumer confidence data boosted investor sentiment. Bio-tech stocks also helped to end the two-day losing streak. The positives offset any negative concerns emerging from data suggesting a drop in sales of new single-family houses in February and a fall in U.S. home prices in January. Meanwhile, investors continued to monitor the latest developments in Crimea.
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The Dow Jones Industrial Average (:DJI) gained 0.6% to close Tuesday’s trading session at 16,367.88. The Standard & Poor (S&P 500) rose 0.4% to finish at 1,865.62. The tech-laden Nasdaq Composite Index went up 0.2% to 4,234.27. The fear-gauge CBOE Volatility Index (:VIX) dropped almost 7.2% to settle at 14.52. Total volume on the New York Stock Exchange was 3.2 billion shares. Declining stocks were outnumbered by advancing stocks on the NYSE. For 40% stocks that declined, 57% advanced.
Markets were positively impacted after the Consumer Confidence Index hit the highest level since January 2008. The Conference Board reported the index had increased from 78.3 in February to 82.3 in March. The rise was larger-than-expected as the consensus estimate predicted it would drop to 78.2. The Expectations Index went up from 76.5 to 83.5. Consumer’ expectations rebounded in March after it fell in February. However, consumers’ expectations about income growth declined from 15.8% to 14.9%.
Tuesday’s other economic data had little effect on the markets. According to the US Department of Commerce, sales of new family single houses for the month of February came in at 440,000. This is 3.3% less than previous month’s reading of 455,000. This fall in sales of new homes in US was more than the consensus estimate of a fall to 446,000. Harsh winter weather, higher mortgage rates and rise in home prices were cited to be the reasons for the drop in sales of new single-family houses in February.
Last week’s data on existing home sales was also not encouraging. Existing home sales data released by National Association of Realtors fell 0.4% to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January.
U.S. home prices fell in January after the S&P/Case-Shiller Home Price Indices revealed that its 20-City composite index slipped 0.1% in January from December. The 20-City composite index registered its third consecutive monthly decline after severe winter weather was cited to be the reason for its fall. The report also states that the 20-City composite index of the S&P/Case-Shiller Home Price Indices improved 13.2% year on year. However, the SPDR S&P Homebuilders ETF (XHB) gained 0.3%. The top two holdings from the sector USG Corporation (NYSE:USG) and DR Horton Inc. (NYSE:DHI) advanced 1.5% and 0.9%, respectively.
Benchmarks also got a boost from the Health Care sector after bio-tech stocks snapped its two-day losing streak. The Health Care Select Sector SPDR (XLV) gained 0.9%. Top holdings from the sector The Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), Merck & Co. Inc. (NYSE:MRK) and Gilead Sciences Inc. (NASDAQ:GILD) gained 2.3%, 1.1%, 2.6% and 1.3%, respectively.
Investors kept an eye on the latest developments in the Crimea region. On Tuesday, Western leaders met with their Russian counterparts. Moscow’s and Kiev’s foreign ministers also held meetings. The positive outcome of this meeting improved investor sentiment. The Obama administration is not likely to impose further economic sanctions provided Russia goes beyond the annexation of Crimea.
Eight out of ten sectors of the S&P 500 ended in the green. The Industrial Select Sector SPDR (XLI) and the Energy Select Sector SPDR (XLE) led the gains as both the sectors increased 0.9%. Key stocks from the Industrials sector such as General Electric Company (NYSE:GE), United Technologies Corp. (NYSE:UTX), The Boeing Company (NYSE:BA), 3M Company (NYSE:MMM) and Honeywell International Inc. (NYSE:HON) rose 1.1%, 1.3%, 0.5%, 1.2% and 0.5%, respectively.
Major holdings from the Energy sector such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Schlumberger Limited (NYSE:SLB), Occidental Petroleum Corporation (NYSE:OXY) and EOG Resources, Inc. (NYSE:EOG) advanced 0.3%, 1.1%, 2.5%, 0.8% and 1%, respectively.
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