Dow Jones surges 92 points on two encouraging reports

A rare double shot of good news about the U.S. economy sent stocks strongly higher Wednesday. The Dow Jones industrial average rose 92 points despite lingering fear about Europe’s debt turmoil.

Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years, the National Association of Realtors said. It was the latest signal that the housing market is improving in many regions following a slump of more than six years.

Homebuilders soared. Lennar Corp. jumped $1.31, or 5 percent, to $28.70. PulteGroup, D.R. Horton and Hovnanian Enterprises also rose sharply.

Earlier, the government said that businesses placed more orders for long-lasting manufactured goods in May, suggesting that their confidence in the U.S. economy was not shaken by signs of weakness that emerged this spring. Core goods, a measure of business investment plans, also jumped.

The reports “were really quite good,” boosting hopes about the economic recovery after three months of weak output and abysmal job growth, said Dennis Gartman, an economist and editor of The Gartman Letter.

The Dow closed up 92.34 points, or 0.7 percent, at 12,627.01. Coca-Cola rose $1.26, or 2 percent, to $76.34, after saying it will invest another $3 billion in India’s rapidly growing market over the next eight years.

The Standard & Poor’s 500 index rose 11.86 points, or 0.9 percent, to 1,331.85. The Nasdaq composite average rose 21.26 points to 2,875.32.

Analysts rate Facebook mix of ‘neutral’ and ‘buy’

The Wall Street analysts who know Facebook best are giving the company’s stock a mixed review. Think: like, not love.

A flood of analyst reports from 33 banks gave Facebook’s stock a mix of “neutral” and “buy” ratings on Wednesday. And there was at least one review that equated to a “sell.”

It marked the end of the 40-day quiet period following Facebook’s initial public offering. Analysts at banks that led the IPO were finally allowed to give public opinions on the stock, offering the first glimpse of what the IPO’s underwriters really think about Facebook.

Facebook’s much-ballyhooed IPO landed with a thud on May 18, with the stock closing just 23 cents above its $38 IPO price. It hasn’t fared much better since. On Wednesday, it fell 87 cents, or 2.6 percent, to close at $32.23.

Madoff brother set to plead guilty to conspiracy charges

The brother of Ponzi scheme king Bernard Madoff is scheduled to plead guilty this week to conspiracy in a criminal case resulting from the multibillion-dollar fraud, court papers say.

Peter Madoff is the former chief compliance officer at the private investment arm of Bernard Madoff’s business.

Court papers signed by a federal judge in Manhattan on Wednesday show Peter Madoff will plead guilty on Friday to conspiracy to commit securities fraud and other offenses including falsifying records. Madoff also agreed to the criminal forfeiture of $143 billion, including all of his real and personal property.

Madoff agrees to serve 10 years in prison, the court papers say.

— From news service reports

 

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