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Stock markets rally worldwide

19 August 2009 08:40 (UTC +04:00)

Bakuâ€“ APA-Economics. U.S. stocks were poised to join a worldwide rebound from Monday’s big selloff, despite giving up some of their early gains amid a worse-than-expected housing report.
The Commerce Department reported that construction of new U.S. homes fell 1 percent in July, missing analysts’ expectations.
Separately, a new report showed wholesale prices fell 0.9 percent in July, pushing annual inflation to record low.
Stock index futures were moderately higher Tuesday, following the lead of overseas markets that rose in part on upbeat economic news from Germany. A research institute has reported that consumer confidence is rising in the country, Europe’s largest economy.
However, there is still much uncertainty in the U.S., where retailers are reporting earnings results that show American consumers are still wary. Home Depot Inc. has issued its second-quarter results, joining other retailers in reporting a drop in its sales.
The world’s largest home improvement retailer said its second-quarter profit fell 7 percent, but its adjusted results beat Wall Street’s expectations, as cost cuts partly offset weak sales. Home Depot also lifted its guidance for full-year earnings.
Dow Jones industrial average futures rose 21, 0.2 percent, to 9,141. Standard & Poor’s 500 index futures rose 2.30, or 0.2 percent, to 980.60, while Nasdaq 100 index futures gained 7.00, or 0.5 percent, to 1,573.25.
Some rebound was to be expected after Monday’s big drop, which took the Dow down 186 points. Stocks fell sharply and bond prices soared on growing fears that nervous consumers won’t be able to spend enough to lift the economy into recovery.
Investors received some mixed results from retailers. TJX Cos. said fiscal second-quarter profit rose 31 percent as its discount-oriented stores continued to lure in cost-conscious shoppers. But Saks Inc. reported that its second-quarter loss widened from a year earlier, while Target Corp.’s second-quarter profit also fell.
Meanwhile, the Commerce Department report showed that construction of new homes and apartments fell 1 percent last month to a seasonally adjusted annual rate of 581,000 units, from an upwardly revised rate of 587,000 in June. Economists polled by Thomson Reuters expected a pace of 600,000 units.
Building permits, seen as a good indicator of future activity, fell 1.8 percent.
In a separate report, wholesale prices dropped sharply in July, triple the decline economists had expected and was driven by big decreases in both energy and food costs.
Core inflation, which excludes energy and food, dropped 0.1 percent in July, better than the 0.1 percent gain economists expected.
Overseas, Japan’s Nikkei stock average rose 0.2 percent. In afternoon trading, Britain’s FTSE 100 was up 0.4 percent, while Germany’s DAX index was up 0.2 percent and France’s CAC-40 was up 0.3 percent.
Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.49 percent from 3.47 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.17 percent late Monday.