NEW YORK – Wall Street resumed its advance on the last day of the quarter as investors focused on economic data.
Tuesday started with news that home prices sank in January and that Chicago-area business conditions deteriorated in March. But consumer confidence data is expected to show a slight improvement in March.
The market is coming off a two-day pullback after rallying on better-than-expected home sales, retail sales and durable goods data. A Treasury plan for banks’ toxic assets and calming remarks from the banks’ CEOs also helped the Dow Jones industrial average soar 21 percent in fewer than three weeks.
If Wall Street can get more evidence that the economy is bottoming out, it has a better chance of making up the sharp losses logged this year. The Dow is still down 14.3 percent for 2009, but up 14.5 percent from its nearly 12-year low on March 9.
Recent data have indicated the economy is “still weak, still poor, but not on a declining trend,” said Rob Lutts, president of Cabot Money Management. And that’s enough to encourage him to buy stocks in industries such as energy and technology — ones that usually turn around when the economy does.
“I’m hopeful that by the end of the year, conditions will have improved,” Lutts said. With the market already pricing in a severe recession, he said, “I don’t think we need a strong improvement to get the stock market going.”
In early trading, the Dow Jones industrial average is up 43.73, or 0.6 percent, at 7,565.75.
Broader stock indicators also gained. The Standard & Poor’s 500 index rose 4.4, or 0.6 percent, to 791.97, and the Nasdaq composite index rose 17.57, or 1.2 percent, to 1,519.37.
The major indexes dropped about 3 percent Monday as the White House rejected General Motors Corp.’s and Chrysler’s turnaround plans, raising the possibility of an automaker bankruptcy.
On Tuesday, the S&P Case-Shiller index of 20 cities showed that U.S. home prices declined by record 19 percent in January from a year ago. The Chicago purchasing manager’s index of business conditions dropped to a reading of 31.4 in March from 34.2 in February.
———
ON THE WEB
New York Stock Exchange: www.nyse.com
Nasdaq Stock Market: www.nasdaq.com