Stocks turn higher after housing report
Tuesday , May 22, 2012 - 9:52 AM
NEW YORK-- An encouraging report on the housing market helped stocks turn higher on Tuesday while Facebook took another fall.
The Dow Jones industrial average rose 52 points to 12,556 an hour after the opening bell. JPMorgan Chase, which has been hammered since disclosing a $2 billion trading loss, rose 4 percent on Tuesday and was the Dow's leading stock.
Stock indexes traded flat until the National Association of Realtors said Americans bought more previously owned houses in April, a hopeful sign for the sluggish housing market.
Sales rose 3.4 percent last month to a seasonally adjusted annual rate of 4.62 million, more than economists had predicted. The median price for houses sold in April rose to $177,400, up 10 percent over the past year.
If history is any guide, the more the housing market improves, the better the stock market performs, said Dan Greenhaus, chief global strategist at the brokerage BTIG.
"The relationship has been unsurprisingly tight," he said in a note to clients following the report. "And we see no reason to think that the relationship will weaken going forward."
In other trading, the Standard & Poor's 500 index rose 10 points to 1,326. Bank stocks led the S&P 500's industry groups. The Nasdaq composite index, which had its biggest gain of the year on Monday, rose 18 points Tuesday to 2,865.
Facebook stock kept sliding, dropping 5 percent in early trading to $32.30. The social networking company's stock has fizzled since its long-awaited initial public offering last week at $38. Facebook sank 11 percent on Monday, even as the rest of the stock market rallied.
Among stocks making big moves:
-- Urban Outfitters Inc. jumped 6 percent, the strongest gain in the S&P 500 indes. The retailer posted earnings late Monday that surpassed Wall Street analysts' expectations on the strength of record sales.
-- Ralph Lauren Corp. rose 4 percent. The clothing company said its quarterly earnings soared 29 percent, helped by strong sales and a lower tax rate. Ralph Lauren Corp. also doubled its quarterly dividend to 40 cents per share.