Weak economic data erode early market gains

Dow Jones: 12,570 (+128.21) Nasdaq: 2,835 (+38.44) S&P 500: 1,345 (+14.10)WALL STREET bulls took the upper hand with a 1 per cent rally yesterday as hopes for a new plan to deal with Greece's debt crisis relieved some investor worry, but grim economic data suggested more hurdles ahead as the SP 500 closed out its worth month since August.

Stocks rebounded late in the session, nearing levels that were approached at the open, but later fell following lacklustre data on US midwestern factory demand and consumer confidence.

A Reuters poll showed investors are the most bearish they have been since the third quarter of last year on concerns about a slowing economy and the situation in Greece. Investors have cut their equity exposure for the fourth straight month.

The Dow Jones industrial average shot up 128.21 points, or 1.03 per cent, to 12,569.79. The Standard & Poor’s 500 index gained 14.10 points, or 1.06 per cent, to 1,345.20. The Nasdaq Composite index rose 38.44 points, or 1.37 per cent, to 2,835.30.

For May, the Dow lost 1.9 per cent and the Nasdaq fell 1.3 per cent. The SP fell 1.4 per cent, its worst month since August, when the US Federal Reserve announced the second round of its quantitative easing programme.

US single-family home prices dropped in March to below their 2009 low, according to the SP/Case-Shiller composite index of 20 metropolitan areas.

A separate report showed an unexpected drop in May consumer confidence, while the Institute for Supply Management-Chicago said business activity in the US midwest grew much less than expected in May.

Tech shares lifted the market, with the SP information technology index up 1.6 per cent. Cisco Systems was one of the Dow’s top gainers, up 2.1 per cent at $16.80, while Apple climbed 3.1 per cent to $347.83 on the news that Steve Jobs, its chief executive who has spent months on medical leave, would open an annual developer’s conference. US-listed shares of Nokia Corp slumped 14.4 per cent to $7.02 after it abandoned hope of meeting key targets just weeks after setting them. The stock dropped on its heaviest volume since February.

About 74 per cent of the New York Stock Exchange closed in positive territory, while 67 per cent of the Nasdaq did. – (Reuters)