Home Sales Data Fuel Wall Street Optimism
By wchung | 06 May, 2025

 

Wall Street is extending its rally as reports on housing and construction show improvement for March.

Stocks are jumping Monday following a National Association of Realtors report that pending U.S. home sales rose from February to March as buyers took advantage of deeply discounted prices and low interest rates.

Investors are also cheering a surprise increase in construction spending after five straight months of declines.

The Dow Jones industrial average is up 150 at 8,362. The blue chips had been up 100 ahead of the reports.

The Standard & Poor’s 500 index is up 16 at 894, while the Nasdaq composite index is up 25 at 1,744.

This week brings a number of other key economic reports, chief among them the April employment report on Friday. Investors are hoping the data will provide further validation that the economy is beginning to heal.

But the market’s greatest concern is the release Thursday of results of the government’s stress tests of the 19 largest U.S. banks. Some investors are worried that the stress test results could upend the market’s stunning advance, which has seen the Dow Jones industrials soar 25.4 percent and the Standard & Poor’s 500 index jump 29.7 percent since March 9.

Analysts expect the market to be rather adrift ahead of the week’s reports.

“It’s going to be hard for the market to commit before they see the results of the stress tests and the unemployment figures on Friday,” said Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati.

Sprint Nextel Corp. reported a first-quarter loss, but beat expectations. The nation’s third largest wireless carrier said its revenue fell and it took a charge related to job cuts. The stock jumped 59 cents, or 12.6 percent, to $5.26.

In the first half-hour of trading, the Dow Jones industrial average rose 90.00, or 1.1 percent, to 8,302.41.

Broader stock indicators also rose. The Standard & Poor’s 500 index rose 7.60, or 0.9 percent, to 885.12, and the Nasdaq composite index rose 13.05, or 0.8 percent, to 1,732.25.

The market’s spring rally was triggered by word from some of the nation’s biggest banks that business conditions were improving, and has since been fortified by those banks’ better-than-expected earnings reports.

Many investors anticipate that the stress tests — designed to determine which banks would need more cash if the recession worsens — will show that several banks need more capital.

Investors are particularly concerned about Citigroup Inc. and Bank of America Corp. The Financial Times reported Sunday that the banks are working on plans to raise more than $10 billion each as they negotiate with regulators over the findings of the stress tests.

Despite worries about the health of banks, market sentiment has been improving and an increasing number of reports suggest the economy’s slide is slowing. But there is still evidence of pain: Chrysler LLC filed for bankruptcy last week, and many companies continue to report weaker-than-expected first-quarter results.

Stocks gained about 1.5 percent last week despite concerns about a potential swine flu pandemic and Chrysler’s bankruptcy filing.

In dealmaking, Italian automaker Fiat confirmed Sunday it is in talks to buy most of General Motors Corp.‘s European operations. GM has been trying to find buyers for its noncore, unprofitable businesses to help it avoid bankruptcy. Fiat is in the process of acquiring a stake in Chrysler LLC, which last week filed for bankruptcy protection.

5/4/2009 10:22 AM SARA LEPRO AP Business Writer NEW YORK