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The Markets Now: S&P 500 Nears Record as Home Prices Rise, Consumer Confidence Falls

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Plus, Monsanto resolves dispute with DuPont.

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Stocks remained higher today as investors reacted positively to home prices and durable goods data despite a sharp drop in consumer confidence. The Dow (INDEXDJX:.DJI) increased 0.63% to 14,538.58. The S&P 500 (INDEXSP:.INX) climbed 0.58% to 1,560.68, and the Nasdaq (INDEXNASDAQ:.IXIC) rose 0.34% to 3,246.40. The S&P 500 is near its all-time closing record of 1,565.15.

S&P Dow Jones Indices reported today that the 10-City Composite and the 20-City Composite of its S&P/Case-Shiller Home Price Indices increased 7.3% and 8.1%, respectively, on an annual basis. All 20 cities showed year-over-year gains, with New York City posting a gain after 28 months of negative annual returns. Phoenix house prices gained the most at 23.2%. With the exception of Detroit, all cities showed acceleration in year-over-year gains. The 10-City Composite gained 0.2% month-over-month, and the 20-City Composite gained 0.1% month-over-month.

As prices increased, sales of new single-family homes cooled in February to a seasonally adjusted 411,000, a 4.6% decrease from the revised January figure of 431,000. The Census Bureau and US Department of Housing and Urban Development stated that the median price of new homes was $246,800, and the average price was $313,700. The departments also estimate that the seasonally adjusted number of new houses still for sale stands at 152,000, or 4.4 months worth of supply, given the current sales rate.

Today the Federal Reserve Bank of Richmond released its separate surveys of manufacturing activity and service sector activity. The seasonally adjusted composite index of manufacturing activity fell from 6 in February to 3 in March, indicating slower growth in the central Atlantic region. Two of the three components of the index decreased: The shipments component fell from 10 to 8, and the new orders component dropped from 0 to -4. The jobs component added one point to reach 9. Expectations improved in March, though, as the index for expected shipments increased from 28 to 31, and the index for planned capital expenditures lifted from 10 to 17. The index for expected manufacturing employment increased from 12 to 14.

The service sector indices also weakened in March. The revenues index fell 11 to 4, and the expectations index dropped from 11 to 6. Hiring strengthened, though, as the employee index went up from 3 to 6.

New durable goods orders increased by $12.4 billion, or 5.7%, month-over-month in February to $232.1 billion, according to the US Census Bureau. Led by aircraft orders, the transportation component climbed $13.3 billion, or 21.7%, to $74.4 billion. In January, new orders decreased by 3.8%. Excluding transportation orders, new orders slipped 0.5%. Excluding defense orders, new orders increased 4.5%.

Shipments of manufactured durable goods increased $2.2 billion, or 1%, in February to $229.3 billion. Unfilled orders for manufactured durable goods climbed $9.4 billion, or 0.9%, to $999.8 billion in February. Inventories of manufactured goods lifted $1.6 billion, or 0.4%, to $376.9 billion in February, the highest reading since the series was first published on a NAICS (North American Industry Classification System) basis in 1992. Non-defense new orders for capital goods rose $7.4 billion, or 10%, to $80.8 billion in February. New defense orders for capital goods spiked $3.3 billion, or 68%, to $8.1 billion in February.
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