North American stocks moved higher on Wednesday, lifted by back-to-back upbeat U.S. economic reports on housing and durable goods.
The Dow Jones industrial average closed at 12,627.01, up 92.34 points, or 0.7 per cent. The broader S&P 500 closed at 1,331.85, up 11.86 points, or 0.9 per cent. In Canada, the S&P/TSX composite index closed at 11,410.94, up 76.52 points, or 0.7 per cent.
The economic news provided some evidence that the dour outlook – suggested by other recent reports – might be exaggerating concerns that the recovery has stalled.
Durable goods orders in May rose 1.1 per cent, topping expectations among economists for a far more modest gain of 0.5 per cent and also above the 0.2 per cent uptick in the previous month. The gain gives more confidence that U.S. businesses continue to invest and spend, despite the tumultuous economic backdrop.
Meanwhile, there was more good news on U.S. housing: Pending home sales for May rose 5.9 per cent over the previous month, well ahead of expectations for a gain of 1.5 per cent. The increase follows what was generally seen as an upbeat reading on U.S. home prices on Tuesday, with April prices rising slightly over the previous month.
U.S. financials showed the biggest gains within the Dow: Bank of America Corp. rose 2 per cent and JPMorgan Chase & Co. rose 3 per cent.
Google Inc. rose 0.8 per cent after it unveiled a tablet computer, called the Nexus, as it strives to support its Android operating system in the tablet universe and compete against Microsoft Corp. and Apple Inc. Apple shares rose 0.4 per cent.
Facebook Inc. fell 2.6 per cent after a number of analsysts – formerly restricted from publishing opinions on the relatively new stock – had their muzzles removed. They sounded relatively cautious about the stock, which alarmed investors who had been anticipating upbeat views and higher target prices.
MacDonald Dettwiler & Associates Ltd. surged 28.3 per cent after it announced on Tuesday evening that it had bought full control of Loral Inc. for $875-million (U.S.), giving it access to the U.S. market.
Among commodities, crude oil rose above the $80 (U.S.) threshold, closing in New York at $80.21 a barrel, up 85 cents. Gold rose to $1,578.40 an ounce, up $3.50.