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US stocks shrug off weak housing and consumer data | US stocks shrug off weak housing and consumer data |
(about 4 hours later) | |
US stocks have shrugged off surprisingly weak economic data. | US stocks have shrugged off surprisingly weak economic data. |
House prices fell a faster-than-expected 1% in October, according to the widely-followed Case-Shiller index, with some cities hitting their lowest levels since 2006. | House prices fell a faster-than-expected 1% in October, according to the widely-followed Case-Shiller index, with some cities hitting their lowest levels since 2006. |
Meanwhile consumer confidence also dropped unexpectedly in December, a survey released on Tuesday revealed. | Meanwhile consumer confidence also dropped unexpectedly in December, a survey released on Tuesday revealed. |
But the Dow Jones Industrial Average ended the day almost unchanged, due to quiet Christmas trading conditions. | |
'No good news' | 'No good news' |
"Overall it was a negative surprise," said Peter Kenny, of New Jersey-based brokerage Knight Equity Markets. | "Overall it was a negative surprise," said Peter Kenny, of New Jersey-based brokerage Knight Equity Markets. |
"But it's not impacting the market so much due to the light volume and lack of activity in the market today." | "But it's not impacting the market so much due to the light volume and lack of activity in the market today." |
Prices were down in all 20 of the US cities surveyed by Standard and Poor's (S&P) for its Case-Shiller index. | Prices were down in all 20 of the US cities surveyed by Standard and Poor's (S&P) for its Case-Shiller index. |
The overall 1% seasonally-adjusted fall in house prices compared with September was almost double the expected rate of 0.6%. | The overall 1% seasonally-adjusted fall in house prices compared with September was almost double the expected rate of 0.6%. |
It confirms that the US housing market is firmly on a downward trend again after enjoying a brief respite in the spring and summer thanks to a $6,000 (£3,890) first-time-buyer tax credit that expired in April. | It confirms that the US housing market is firmly on a downward trend again after enjoying a brief respite in the spring and summer thanks to a $6,000 (£3,890) first-time-buyer tax credit that expired in April. |
"The double-dip is almost here, as six cities set new lows for the period since 2006 peaks," said S&P index committee chairman David Blitzer. "There is no good news in October's report." | "The double-dip is almost here, as six cities set new lows for the period since 2006 peaks," said S&P index committee chairman David Blitzer. "There is no good news in October's report." |
Meanwhile, the Conference Board revealed that its consumer confidence index had fallen to 52.5 in December from an upwardly revised 54.3 a month earlier. | Meanwhile, the Conference Board revealed that its consumer confidence index had fallen to 52.5 in December from an upwardly revised 54.3 a month earlier. |
The survey of 5,000 households also suggested that people were finding it harder to find jobs again. | The survey of 5,000 households also suggested that people were finding it harder to find jobs again. |
"Consumers' assessment of the current state of the economy and labour market remains tepid, and their outlook remains cautious," said Lynn Franco of the Conference Board's consumer research centre. | "Consumers' assessment of the current state of the economy and labour market remains tepid, and their outlook remains cautious," said Lynn Franco of the Conference Board's consumer research centre. |
"Thus, all signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate." | "Thus, all signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate." |
Markets had expected confidence to increase further, to 56, although this is still well below the level of 90 associated with previous periods of economic expansion. | Markets had expected confidence to increase further, to 56, although this is still well below the level of 90 associated with previous periods of economic expansion. |
"People are getting affected emotionally," said Keith Springer, a financial advisor in California, citing the seeming political deadlock in Washington as one factor influencing public sentiment. | "People are getting affected emotionally," said Keith Springer, a financial advisor in California, citing the seeming political deadlock in Washington as one factor influencing public sentiment. |
"On top of that, unemployment isn't dropping - you have a split between the 'haves' and the 'have nots' in this country." | "On top of that, unemployment isn't dropping - you have a split between the 'haves' and the 'have nots' in this country." |
He also said the weak housing market was wearing people down. | He also said the weak housing market was wearing people down. |
"Without strong housing collateral for banks, you really can't get a spur in economic growth to reduce unemployment," he said. | "Without strong housing collateral for banks, you really can't get a spur in economic growth to reduce unemployment," he said. |
But the gloomy mood apparently did not dent the Christmas sales, according to Mastercard's Spending Pulse survey. | But the gloomy mood apparently did not dent the Christmas sales, according to Mastercard's Spending Pulse survey. |
It reported on Monday that retail and service sales excluding cars across the US between 5 November and 24 December were up 5.5% compared with a year ago. | It reported on Monday that retail and service sales excluding cars across the US between 5 November and 24 December were up 5.5% compared with a year ago. |
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