Stocks up on US manufacturing data
Reuters and AFP
December 26, 2013, 12:13 am TWN
NEW YORK/HONG KONG--U.S. shares edged higher into record territory on Tuesday, backed by stronger-than-expected manufacturing data that in turn spurred U.S. Treasury yields to 2 1/2 year highs on a belief the economy is on a sustained path of recovery.
In thin pre-Christmas holiday trading, the positive economic data contributed to gains for the U.S. dollar against its major trading partners such as the euro zone and Japan.
An errant trade sent copper prices to their highest level since April in New York COMEX trade, a source familiar with the matter told Reuters. Prices were adjusted down after the discovery of the error, the source said.
U.S. share prices posted modest gains. The Dow Jones industrial average rose 62.94 points or 0.39 percent to close at a record 16,357.55. The S&P 500 gained 5.33 points or 0.29 percent, to hit a record 1,833.32. The Nasdaq Composite added 6.513 points or 0.16 percent, to finish at 4,155.417. U.S. stock markets closed early at 1 p.m. EST.
“Investors have taken their positions for the year, so what we're seeing is a market pause to digest the very strong rally we've had,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
U.S. durable goods orders for November surged 3.5 percent on rising demand for goods across a spectrum of industries, from aircraft to machinery and computers and electronic products.
In a second report, government data showed November new home sales fell from a five-year high, dropping by 2.1 percent. However, October's sales were revised to their highest level since July 2008.
The news added to a run of recent figures showing a pick-up in the U.S. economy — including data on unemployment and economic growth — indicating it is well on the road to recovery.
The stronger economic data supports the U.S. Federal Reserve's decision last week to start trimming its monthly bond purchases as the economy might be gathering more upward momentum into early 2014.
“The path of least resistance right now is lower bond prices and higher yields,” said John Brady, managing director of interest rate futures sales at R.J. O'Brien and Associates in Chicago.