Stocks rose modestly on Wednesday, ending a two-day slide, following an upbeat report on the U.S. housing market and new economic stimulus efforts by Japan’s central bank.
The Dow Jones industrial average closed at 13,577.96, up 13.32 points or 0.1 per cent. The broader S&P 500 closed at 1461.05, up 1.73 points or 0.1 per cent. In Canada, the S&P/TSX composite index closed at 12,436.16, up 13.45 points or 0.1 per cent.
The Bank of Japan announced that it would expand its asset-purchase program in an effort to boost its economic activity, raising purchases to ¥80-trillion from ¥70-trillion and extending the program to the end of 2013.
The move adds to a unified move by the world’s major central banks to put the global economic recovery back on track. Last week, the U.S. Federal Reserve announced a plan buy mortgage debt in an effort to boost U.S. economic activity. And the European Central Bank said it would buy short-term bonds of financially distressed countries, easing pressure on the banking sector.
Meanwhile, U.S. existing home sales rose 7.8 per cent in August over the previous month, well ahead of expectations, and inventories of unsold homes fell – and providing more encouraging signs that the long-moribund housing market is coming back to life and might soon contribute to the economy in a meaningful way.
U.S. homebuilders were among the biggest winners. PulteGroup Inc. rose 4.3 per cent and D.R. Horton Inc. rose 4.1 per cent.
Among other U.S. stocks, Walt Disney Co. rose 1.5 per cent and Home Depot Inc. rose 1 per cent.
Energy producers weighed on major indexes after the price of crude oil declined with rising U.S. inventories. In New York, oil fell to $91.98 (U.S.) a barrel, down $3.3, marking its biggest one-day retreat in nearly three months.
Among Canadian energy stocks, Suncor Energy Inc. fell 2.1 per cent and Canadian Natural Resources Ltd. fell 2.2 per cent.