Positive economic reports lift US stocks

S&P 500 notches its first-ever finish above the milestone level of 2,000

U.S. stocks edged higher on Tuesday, 26 AUgust 2014 with the S&P 500 notching its first-ever finish above the milestone level of 2,000. A stronger-than-expected reading on consumer confidence provided a lift, and investors took a somewhat mixed report on durable-goods orders in stride. Economic data included Durable Orders, FHFA Housing Price Index, Case-Shiller 20-city Index, and Consumer Confidence.

The Dow Jones Industrial Average advanced by 29.83 points, or 0.2%, to end at 17,106.70. The Nasdaq Composite tacked on 13.29 points, or 0.3%, to end 4,570.64. The S&P 500 rose 2.10 points, or 0.1%, to end at 2,000.02.

 

Eight out of ten sectors ended higher led by energy sector. Utilities and industrials performed worst and lost ground.

Stocks held on to gains after data showed U.S. orders for durable goods jumped more than 22% in July, driven by big orders for Boeing aircraft. Excluding the transportation sector, sales were down 0.8% amid widespread weakness.

Also, the Conference Board's Consumer Confidence Index rose to 92.4 in August from a downwardly revised 90.3 (from 90.9) in July, while the consensus expected a decline to 88.3. The Present Conditions Index increased to 94.6 in August from 87.9 in July, while the Expectations Index fell to 90.9 from 91.9.

Comments from European Central Bank president Mario Draghi late last week in Jackson Hole, Wyoming, are concerning to many market watchers. Draghi strongly hinted the ECB is set to implement more monetary stimulus measures to prop up the flagging European Union economyand to ward off the threat of deflation in the bloc. This notion is an underlying bullish factor for commodities.

Among stocks under focus, Best Buy shares closed down 6.8% amid a sluggish outlook. The struggling retailer was the day's worst performer in the S&P 500.

Burger King Worldwide and Canada-based Tim Hortons confirmed Tuesday that they plan to combine to create a new company in an $11 billion deal. They are getting financing help from Warren Buffett's Berkshire Hathaway. Burger King shares lost 4.3% after surging Monday, while Tim Hortons' U.S.-listed shares gained 8.5%.

The financial sector received support from heavily-weighted components like Citigroup and JPMorgan Chase. Similarly, foreign banks fared well with the likes of Deutsche Bank and UBS posted respective gains of 2.0% and 0.6%.

Bullion prices finished higher on Tuesday, 26 AUgust 2014 at Comex. Gold prices rose but two-month lows weren't far off as a stronger dollar and an appetite for equities continue to weigh. Gold for December delivery settled up $6.30, or 0.5%, at $1,285.20 an ounce. September silver settled up nearly 3 cents, or 0.1%, to $19.39 an ounce.

Crude-oil futures gained on Tuesday, 26 August 2014 at Nymex with some support from international tensions and as traders kept an eye on the upcoming weekly supply reports. Light, sweet crude futures for delivery in October rose 51 cents, or 0.5%, to settle at $93.86 a barrel on the New York Mercantile Exchange.

The presidents of Ukraine and Russia held talks in Minsk, Belarus on Tuesday amid growing concerns about a counteroffensive by Russia to reverse gains Ukrainian forces have made in eastern Ukraine. Escalating violence in oil exporter Libya also worried investors, with U.S. officials saying Tuesday Egypt and the United Arab Emirates are behind recent airstrikes in the North African country.

Tomorrow's economic data will be limited to the weekly MBA Mortgage Index, which will be released at 7:00 ET.

Powered by Capital Market - Live News