Signs of slow recovery lift markets

Market confidence was restored on Tuesday as a strong industrial production report, an improvement in the housing market and better-than-expected earnings showed that economy is still growing, though slowly.

As of Tuesday's market closing, the Dow Jones industrial average rose 103.84 points, or 1.01 percent, to 10,405.85. The Standard & Poor's 500 index jumped 13.16 points, or 1.22 percent, to 1,092.54 and the Nasdaq gained 27.57 points, or 1.26 percent, to 2,209.44.

The Commerce Department reported on Tuesday that the construction of new homes and apartments rose 1.7 percent in July, less than average forecast. Meanwhile, applications for building permits fell by 3.1 percent, more than analysts had expected.

Home sales have slumped after the tax rebate for home buyers expired in April. So even a slight improvement in housing sales are considered positive for the market.

The Federal Reserve reported that the output of U.S. factories, mines and utilities rose 1 percent in July, double the 0.5 percent growth forecast by economists.

A separate report from the Labor Department showed that prices at the wholesale level rose for the first time since March, providing relief for investors worried about deflation.

On corporate front, retail giants Wal-Mart and Home Depot both reported better-than-expected profits for the second quarter, however their sales missed estimates.

Strong demand for Irish and Spanish government bond auction sent the euro strengthening against the dollar on Tuesday. A falling greenback usually increases the appeal of energy commodities as alternative investment.

Light, sweet crude for September delivery rose 53 cents to settle at 75.77 U.S. dollars a barrel on the New York Mercantile Exchange.

Brent crude for October delivery rose 1.12 dollars to 76.75 dollars a barrel on the ICE Futures Exchange in London.

In late New York trading, the euro rose to 1.2883 dollars from 1.2809 dollars late Monday, while the British pound retreated to 1. 5569 dollars from 1.5642 dollars.

In other trading, the dollar rose to 85.54 Japanese yen from 85. 32 yen, rose to 1.0434 Swiss francs from 1.0400 francs, but fell to 1.0326 Canadian dollars from 1.0446 Canadian dollars on late Monday.

Source:Xinhua