By Kate Gibson, MarketWatch –
NEW YORK — U.S. stocks rose Tuesday, with consumer discretionary and energy companies gaining on signs of stabilization in housing but investors still on shaky ground ahead of a summit of European leaders.
“Housing is bucking the trend, and that speaks to better confidence among consumers. Home builders and energy are getting a bounce on the idea household demand for gasoline may not be as weak,” said Jeffrey Kleintop, chief market strategist at LPL Financial.
“We’d like to be more optimistic, but we’re not expecting anything definitive out of this, which is a problem,” John De Clue, chief investment officer at U.S. Bank Wealth Management, said about the gathering of European leaders. “The pattern has been interesting ideas are put forth, but then in peeling the onion, they are difficult to institute in reality.”
After rising as much as 74 points and falling 50, the Dow Jones industrial average ended at 12,534.67, up 32.01 points, or 0.3 percent, with Chevron Corp. pacing the gains.
The S&P 500 index added 6.27 points, or 0.5 percent, to 1,319.99. The Nasdaq composite climbed 17.90 points, or 0.6 percent, to 2,854.06.
Crude turned higher, with oil futures adding 15 cents to finish at $79.36 a barrel on the New York Mercantile Exchange. Gold futures fell $13.50 to end at $1,574.90 an ounce.
U.S. home prices rose 1.3 percent in April, their first monthly gain since last autumn, S&P/Case-Shiller data showed.
A report that had consumer confidence in June falling for a fourth straight month illustrates “a lull here in the economy,” said Andrew Fitzpatrick, director of investments at Hinsdale Associates.
“People sure don’t feel very confident,” LPL’s Kleintop said. But the Conference Board’s index, which hit 62 last month, “is still above average and better than we saw around this time last year.”
In fact, the week now under way marks the beginning of a six week period that has been the best for equities in each quarter of recent years, Kleintop said.
Investors remained wary ahead of a gathering of European leaders later in the week, with Germany offering a tepid response to a road map released by European Union officials outlining a plan to tighter fiscal integration.
Spanish and Italian bonds declined and the euro softened as those nations’ borrowing costs rose at debt auctions. Egan-Jones cut Germany’s sovereign rating to A+ from AA-.
Markets were briefly rattled after Reuters reported German Chancellor Angela Merkel told politicians in her ruling coalition that Europe would not have shared total debt liability “as long as I live.”
“The market really doesn’t know what to make of this. We’ve seen summits in the past that haven’t produced much, so the bar has been lowered,” Fitzpatrick said of expectations ahead of a two-day gathering that starts Thursday in Brussels.
Merkel on Monday had played down large moves such as the issuance of common debt until euro-area countries agree to broad oversight of their budgets.
Greece on Tuesday named an economics professor to replace the finance minister who resigned Monday after less than a week on the job.