Created on Tuesday, 26 March 2013 Written by MATTHEW CRAFT,AP Business Writer
NEW YORK (AP) — Signs that the economic recovery is gaining strength helped push the stock market higher Tuesday. An increase in home prices and orders for airplanes and other manufactured goods sent stocks up from the opening bell.
The Dow Jones industrial average rose 90 points, or 0.6 percent, to 14,537 shortly after noon on Tuesday.
Factory orders surged in February, helped by a surge in demand for commercial aircraft. Overall orders for durable goods, a catchall term for products ranging from refrigerators to jumbo jets, surged 5.7 percent from the previous month, the Commerce Department said Tuesday. It was the biggest increase in five months.
The Standard & Poor's 500 index rose eight points, or 0.6 percent, to 1,560. The Nasdaq composite was up nine points, or 0.3 percent, to 3,245.
"Unless something major comes along to derail this rally, it just seems like the market is going to keep climbing higher," said Marty LeClerc, the managing partner of Barrack Yard Advisors, an investment firm in Bryn Mawr, Pa.
The economic reports out Tuesday added to evidence that the economy is slowly improving, and that's exactly what many investors want right now, LeClerc said. Slow growth means it will take a while before the Federal Reserve starts unraveling its bond-buying program and raising interest rates.
The gains were widely shared in midday trading. All 10 industry groups in the S&P 500 rose. Health care companies and utilities led the way.
Netflix surged 5 percent, leading the S&P 500, after an analyst at Pacific Crest Securities said the stock will likely climb as the company adds subscribers. Netflix's database of its members' viewing habits should give it an edge in creating new shows and draw more people to sign up for the video-streaming service, the analyst said.
Housing prices rose in January at the fastest pace since the summer of 2006, before the housing bubble popped. The Standard & Poor's/Case-Shiller 20-city price index climbed 8.1 percent in the 12 months to January. That compares with a 6.8 percent increase the previous month. Prices rose in all 20 cities, led by Phoenix.
European markets rose modestly as investors gain confidence in the new bailout plan arranged for Cyprus and its banking system. The island country decided to keep its banks closed for another two days in an attempt to ward off panicked withdrawals.
The yield on the 10-year U.S. Treasury note rose to 1.94 percent from 1.92 percent late Monday as demand eased for ultra-safe bonds.
For the year, the Dow is up 11 percent and the S&P 500 is up 9 percent.
Among stocks making big moves:
— Drive-in restaurant chain Sonic jumped 8 percent after reporting that its quarterly earnings more than doubled. Sales were flat but Sonic said its expects them to improve in the year ahead. Its stock rose 96 cents to $12.69.
— Supervalu rose after announcing plans to lay off more than 1,000 people, roughly 3 percent of its workforce. The supermarket operator said its recent sale of five grocery chains means it needs fewer workers. Supervalu's stock gained 5 cents, or 1 percent, to $5.10.
— Children's Place Retail Stores sank 1 percent after the company reported weaker quarterly earnings. The retailer also said bad weather would crimp its sales. The company's stock lost 49 cents to $45.50.