After being warned by analysts to approach August with caution, investors were still willing to bet on positive data. US stocks closed at year highs last Friday as investors saw the 7.2% rise in home sales as a very positive indicator that the real estate market is on the uptake.
Aside from the home sales data, investors were also spurred on by The Fed chairman Ben Bernanke’s speech where Bernanke noted that the global economy is now more stable and that near-term growth prospects are, “good.” France and Germany are already out of recession.
The Dow closed 155.91 points (1.67%) higher at 9,505.96. Broad market index Standard & Poor rose 18.76 points or 1.86% to 1,026.13. Nasdaq finished 31.68 up (1.59%) to 2,020.90.
This week’s focus will again be on data. Wednesday will see a releases data on new home sales and durable goods orders for last month. Friday, reports on personal income and personal consumption will be made available. These reports will be indicators whether a recover is sustainable.
Source: Business Week
