It was a busy day on Wall Street, highlighted by the return of the bulls after a one day respite to start the new trading week. All told, advancers far outpaced decliners on the day. The Dow Jones Industrial Average rose an eye-catching 214 points, to end the day at 10,405. The other two major U.S. stock indexes, the NASDAQ Composite and the S&P 500, also fared very well, rising 2.8% and 2.4%, respectively.
A few factors contributed to the day’s broad-based gains, most notably the strengthening of the euro, which has been battered in recent weeks, as debt concerns engulf a few nations in the European Union. The euro, which has become a yardstick used by equity investors to gauge the market’s appetite for risk, rose to its best level since earlier this month. The data was positive news for stocks of industrial and technology companies that do a good deal of business overseas. The resultant strong performance of industrial and technology stocks pushed all the indexes markedly high, especially the tech-heavy NASDAQ. Noteworthy gainers included tech giants CSCO, MSFT, INTC, DELL and AAPL.
The strength of the euro against the dollar today helped the commodities markets, as well. Commodities become more affordable for overseas buyers when the dollar falls. This was good news for the oil producers. On the day, crude oil rose 2.4%, to $76.94 per barrel. The rise in the price of oil lifted energy stock, with a noteworthy jump in the share price of HAL.
Meanwhile, the news was not as bright for the housing industry, which has been one of the last sectors to join in the evolving U.S. economic recovery. The National Association of Home Builders/Wells Fargo Housing Market Index, which measures current sales conditions, fell five points in June. The survey noted that homebuilders are feeling less confident about a near-term housing market recovery now that government incentives for buyers (i.e., an $8,000 tax credit) have expired. It remains to be seen whether the growing pessimism amongst builders will become a drag on economic output.
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