Stocks close higher; Dow’s 3rd week of losses
8/23/2013SAN FRANCISCO — U.S. stocks closed higher today, shaking off losses following disappointing new-home-sales data, but a big boost from Microsoft’s CEO news failed to raise the Dow industrials for the week.
The Dow Jones industrial average rose 46.77 points, or 0.3 percent, to close at 15,010.51. But the index declined for a third consecutive week, its longest weekly losing streak since Nov. 16, 2012.
Blue chips had plenty of support from shares of Microsoft Corp., which closed up 7.3 percent at $34.75, the best performer on the Dow following news that CEO Steve Ballmer will retire within 12 months.
Both the Standard & Poor’s 500 index and the Nasdaq composite index, however, snapped their two-week losing streaks. The S&P 500 rose 6.54 points, or 0.4 percent, to close at 1,663.50 and log a 0.5 percent rise on the week.
The Nasdaq composite advanced 19.08 points, or 0.5 percent, to close at 3,657.79, for a weekly gain of 1.5 percent.
Earlier in the morning, stocks faced head winds from the release of new-home sales data, which was much weaker than expected.
But as investors digested the housing data, stocks started clawing their way back into positive territory, likely treating the poor numbers as an argument for delaying tapering of the Federal Reserve’s asset purchases.
Two Fed officials offered mixed comments in CNBC interviews from the Fed’s conference near Jackson Hole, Wyo., early today, with Federal Reserve Bank of Atlanta President Dennis Lockhart backing a September taper with a caveat, and St. Louis Fed Bank President James Bullard saying there’s no reason to hurry the taper, which refers to the central bank’s much-anticipated reduction in its bond purchases.
The market latched onto this uncertainty and treated the housing data as another data point to support a delay of tapering, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
“To the extent they haven’t made their minds up, this is a data point you have to chalk up to deferring tapering for now,” Luschini said.
In addition, investors were taking in upbeat German and U.K. GDP data, as well as Nasdaq OMX Group Inc.’s CEO saying he’s dedicated to improving the exchange’s performance after Thursday’s three-hour trading halt.
Nasdaq CEO Robert Greifeld today said the exchange was “deeply disappointed with what happened yesterday.” Speaking in an interview with CNBC, Greifeld said the Nasdaq had handled the trading problem “in a logical and organized way.”
In a statement after the close Thursday, Nasdaq OMX said most of the shutdown was spent figuring out the market reopen, rather than dealing with technical problems. Actual issues were resolved within 30 minutes, but planning time was needed “to ensure an orderly reopening of trading.” Then today, Nasdaq said there was no evidence that the halt was a result of hacking.
On the corporate front, shares of Pandora Media Inc. closed down 13 percent after the streaming-music provider gave a weaker-than-expected earnings outlook late Thursday.
Shares of Aeropostale Inc. tumbled 20 percent after the teen-apparel retailer reported weak earnings and a sour third-quarter outlook. A day earlier saw disastrous results from Abercrombie & Fitch Co.