Global shares, dollar rebound after strong U.S. data

Tue Jun 25, 2013 11:37am EDT
 
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By Herbert Lash

NEW YORK (Reuters) - The dollar recovered from early losses and global equity markets rose on Tuesday after better-than-expected government reports on the U.S. economy and strong consumer confidence data gave investors a reprieve about worries over Federal Reserve policy.

Orders for durable goods rose more than expected in May and a gauge of planned business spending gained for a third straight month, while existing single-family home prices posted their biggest rise in seven years in April.

In another better-than-expected report, the Conference Board's U.S. consumer confidence index rose in June to 81.4 from a downwardly revised 74.3 in the prior month, the private business research group reported.

At first blush, the data would be seen as bullish as the economy is improving. But that suggests the Fed can move forward with plans to ease its bond-buying program. Fears of such a move have led bond yields to jump and stocks to drop in recent days.

"The market trend has turned to the downside. It is now easier to sell rallies than to buy dips, so strategies have flipped," said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management.

Global markets tracked by MSCI's all-country world equity index .MIWD00000PUS were up 0.66 percent, while the FTSEurofirst 300 index .FTEU3 of leading European companies rose 1.36 percent, recovering some of the 5.5 percent it lost in the previous three trading days.

The Dow Jones industrial average .DJI was up 92.54 points, or 0.63 percent, at 14,752.10. The Standard & Poor's 500 Index .SPX was up 11.26 points, or 0.72 percent, at 1,584.35. The Nasdaq Composite Index .IXIC was up 15.56 points, or 0.47 percent, at 3,336.31.

The pause in the market's recent rout began when two Fed policymakers on Monday downplayed the notion of an imminent end to the central bank's money-printing and said the market reaction was not yet a cause for concern.   Continued...

 
Traders work on the floor at the New York Stock Exchange, June 24, 2013. REUTERS/Brendan McDermid