Stocks climb as quarter ends
NEW YORK -- Wall Street resumed its advance on the last day of the quarter as investors focused on economic data.
A measure of consumer confidence inched up in March after plummeting to historic lows in February, a private research group reported Tuesday.
The Conference Board said its consumer confidence index rose to 26.0, from a revised 25.3 reading in February — below expectations, but an uptick nonetheless.
The market is coming off a two-day pullback after rallying on better-than-expected home sales, retail sales and durable goods data. The Dow Jones industrials have jumped 21% in less than three weeks following a government plan for cleaning up bad assets from banks and reassuring remarks from the CEOs of several banks who said their businesses did well in January and February.
If Wall Street can get more evidence that the economy is bottoming out, it has a better chance of making up the sharp losses logged this year. The Dow is still down 14.3% for 2009, but up 14.5% from its nearly 12-year low on March 9.
Recent data have indicated the economy is "still weak, still poor, but not on a declining trend," said Rob Lutts, president of Cabot Money Management. And that's enough to encourage him to buy stocks in industries such as energy and technology — ones that usually turn around when the economy does.
"I'm hopeful that by the end of the year, conditions will have improved," Lutts said. With the market already pricing in a severe recession, he said, "I don't think we need a strong improvement to get the stock market going."
On the last day of the quarter, some "window dressing" buying may also be affecting the market. Portfolio managers that may have missed out on the recent rally want to be sure they aren't left behind, said Randy Frederick, director of trading at Charles Schwab.
"Imagine you're an institutional investor, you have a lot of cash on hand and missed the recent rally," he said. "Now, you don't want to be left behind in the next quarter. You probably want to put some of the cash to work."
The major indexes had dropped about 3% Monday as the White House rejected General Motors' and Chrysler's turnaround plans, raising the possibility of an automaker bankruptcy.
On Tuesday, the S&P Case-Shiller index of 20 cities showed that U.S. home prices declined by record 19% in January from a year ago. The Chicago purchasing manager's index of business conditions dropped to a reading of 31.4 in March from 34.2 in February.
Bond prices were modestly higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.69% from 2.72% late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged from late Monday at 0.18%.
Crude oil fell 37 cents to $48.04 a barrel on the New York Mercantile Exchange.
The dollar was lower against other major currencies. Gold also fell.
Overseas, Japan's Nikkei stock average fell 1.5%. In afternoon trading, Britain's FTSE 100 rose 2.8%, Germany's DAX index rose 1.1%, and France's CAC-40 rose 1.4%.