Stocks Shrug Off Data to Close With Gains
The blue-chip Dow Jones Industrial Average ($INDU) spent most of the morning below the 10,000 level before turning positive in the last couple of hours of the session. The Dow added 20 points, or 0.2%, to close at 10,060. The broader S&P 500 ($INX) gained 3, or 0.3%, to 1,055. The more volatile, tech-heavy Nasdaq Composite ($COMPX) rose 18 points, or 0.8%, to finish at 2,142.
Shares had to shrug off more bad news in the housing market, as new-home sales plunged more than 12% in July to to a 276,000-unit annual rate -- the lowest level since the U.S. Commerce Department started keeping records in 1963. That follows Tuesday's report that July sales of previously occupied homes dropped more than 27%, the sharpest monthly drop for total existing-home sales on record going back to 1999, with declines being seen in every region of the U.S.
In other disappointing data, orders for durable goods in July fell well short of economists' forecasts. Durable goods orders rose just 0.3% last month, the Commerce Department said Wednesday. A Bloomberg survey expected July durable goods to rise 2.5% in July. Equally significant, the more telling ex-transportation component, which excludes often-volatile aircraft orders and parts, plunged 3.8%.
The market has been characterized by light volume for months, which tends to amplify swings in ether direction. And although summer vacation season typically makes August a slow month for the market, this year is extraordinarily slow, according to research by Bespoke Investment Group.
Through the first 16 trading days of August, the S&P 500 has averaged 820 million shares traded per day -- the lowest reading since 1999, according to Bespoke. By way of comparison, average daily volume in August of 2007 was more than twice what the Street is registering now. "It seems that a lot of people are either out of the office, out of the market, or both," say the folks at Bespoke.