LONDON (ShareCast) - - Durable goods, S&P/Case-Shiller beat forecasts
- Consumer confidence, new home sales miss estimates
- Berkshire Hathaways increases stake in Goldman
Dow Jones (DJI: ^DJI - news) : 0.65%
S&P 500: 0.54%
The S&P 500 was again close to its all-time high on Tuesday morning in New York with strong durable-goods orders and a better-than-expected reading of home prices offsetting a decline in consumer confidence and new home sales.
US benchmarks were temporarily putting aside concerns about Cyprus that have dampened markets in Italy and Spain today. The head of the Eurogroup, Jeroen Dijsselbloem, implied that Cyprus' bailout and the plan to force losses on uninsured depositors would serve as a template for future bailouts across the Eurozone. He has since back-tracked on his original comments but sentiment surrounding the issue is still very fragile.
Markets focus on durable goods, home prices
US durable-goods orders grew at a 5.7% clip in February from a month earlier, well ahead of the 3.9% increase forecast by the consensus. Excluding the defence sector, however, orders actually dropped by 0.5%. Even so, the previous month's reading was revised significantly higher to show a drop of 3.8%, instead of the 5.2% fall initially calculated.
Meanwhile, the S&P/Case-Shiller 20-city home price index, which is a leading measure of US home prices, showed that prices gained 8.1% in the 12 months ending January, an acceleration from the 6.8% gain the month before and ahead of the 7.9% increase expected. This was the highest annual rate since the summer of 2006.
Traders were shrugging off the Conference Board's consumer confidence index which slipped from 68.0 to 59.6 in March, a much sharper fall than to the 67.5 expected. Meanwhile, new home sales slipped 4.6% in February, worse than the estimated 3.9% decline.
Goldman gains after amending stock warrant deal with Berkshire
Investment banking giant Goldman Sachs (NYSE: GS-PB - news) saw shares rise today after announcing that it has amended its 2008 warrant agreement with Warren Buffett's Berkshire Hathaway (Xetra: 854075 - news) from cash settlement to net share settlement, making it one of the top 10 biggest shareholders in the bank.
"We intend to hold a significant investment in Goldman Sachs, a firm that I did my first transaction with more than 50 years ago," Buffett said.
Coal group Peabody was higher after Raymond James upgraded the stock from 'market perform' to 'outperform'.