US STOCKS rose yesterday after strong economic data boosted confidence, while Apple bolstered the Nasdaq after billionaire investor Carl Icahn took to Twitter to reveal a long position in the stock.
Rising US retail sales in July, combined with a higher Zew German sentiment index and Eurozone industrial production, painted a rosier picture of the global economy.
The data pushed US Treasury yields higher and homebuilder stocks fell in anticipation of higher mortgage rates. All but one of the 19 components of the PHLX housing index fell, with Ryland Group down five per cent to $36.04.
Meanwhile, Atlanta Federal Reserve president Dennis Lockhart said the Fed could begin reducing its bond-buying stimulus as early as its September meeting, but data has been too mixed to outline a detailed exit strategy from stimulus.
The day’s moves were “a reflection of the better economic data and a growing acceptance by the market that the Fed is going to scale back purchases sooner rather than later,” said Quincy Krosby, market strategist at Prudential Financial.
Investors have been closely watching for clues about when, and by how much, the Fed will begin to wind down its $85bn a month in asset purchases, which have helped lift the S&P 500 to a record high while keeping interest rates low.
The Dow Jones industrial average rose 31.33 points or 0.2 per cent, to 15,451.01, the S&P 500 gained 4.69 points or 0.28 per cent, to 1,694.16 and the Nasdaq Composite added 14.492 points or 0.39 per cent, to 3,684.443. Apple shares shot up 4.8 per cent to $489.57, their highest since late January, after Icahn said he’d had a “nice conversation” with Apple CEO Tim Cook about a larger stock buyback.