Stocks and oil rallied to the highest levels this year as a report showing strong sales of existing homes boosted investors’ hopes for a U.S. economic rebound on Friday.
The Dow Jones Industrial Average climbed 155.91 points, or 1.7%, to 9505.96, a new closing high for 2009. The broad S&P 500-stock index gained 18.76 points, or 1.9%, to a new yearly high of 1026.13 amid gains in all its sectors.
Stocks gained momentum after the National Association of Realtors said home resales rose 7.2% in July. That was the largest monthly increase in at least 10 years, as first-time buyers rushed to capitalize on a tax credit that expires this fall.
The market held relatively steady and trading volume slowed following the approximately 15-minute spike in the immediate aftermath of the housing data. But that was enough to leave the market with a solid gain for the session.
“The housing number is certainly the absolute cause of the rally today,” said Richard Sparks, senior options trader at Schaeffer’s Investment Research in Cincinnati, Ohio. “It didn’t just beat the consensus; it did so by a stunningly wide margin. When you have things like that happen, you get investors and traders who haven’t been fully committed to the market jumping aboard because they suddenly feel like they don’t want to miss out.”
Indeed the size of July’s increase in sales in percentage terms was more than triple the expectations of analysts, according to Thomson Reuters data.
For the full article, see the Wall Street Journal:
http://online.wsj.com/article/SB125085283439549091.html#printMode
This article raises the important question of the difference between what you see in a headline and what you see in your own account statements. Even with certain stock indexes at year highs, it doesn’t mean that your own account has “come back” or is worth anywhere near the actual dollars you put into the account. The general news is not the specifics of your account. We continue to hear from many people who have suffered large losses, with only slight gains. These people can often recover amounts from the stockbrokerage firm when we look closely at the types of investments which were recommended by their brokers.
