Home sales and an upbeat FedEx buoy US equities
A N upbeat outlook from FedEx, coupled with encouraging home sales, lifted US stocks yesterday, keeping t
he S&P 500 above 1,100 for a second day and suggesting the rally could last.
FedEx raised its outlook, boosting its stock by 5.6 per cent. The news from the package
delivery and business services company validates the optimism of those who believe the economic recovery is less fragile than recently thought.
“FedEx was very real, on top of UPS (last week), so if the economy is slowing, people are still shipping a lot of stuff around for a slowing economy,” said Stephen Massocca, managing director of Wedbush Morgan.
The Dow Jones industrial average gained 100.81 points, or 0.97 per cent, to 10,525.43. The Standard & Poor’s 500 Index rose 12.35 points, or 1.12 per cent, to 1,115.01. The Nasdaq Composite Index advanced 26.96 points, or 1.19 per cent, to close at 2,296.43. The gains pushed the Dow up 0.9 per cent for the year to date and lifted the Nasdaq 1.2 per cent for the year so far, while the S&P 500 closed just shy of break-even.
“There is a certain psychological victory there,” Massocca added.
A surprising 23.6 per cent jump in new home sales in June from May countered some disappointing data in recent weeks that had increased concerns the economy may slip back into recession.