Morale on Wall Street bucks weak US data

THE DOW industrials ended slightly higher last night while the S&P 500 and the Nasdaq cut most of the day’s losses in a sign that investor sentiment remains generally positive despite several weak manufacturing surveys from around the world.

Pockets of strength included housing, with an index of housing stocks up 0.8 per cent, following Wednesday’s gains on better-than-expected housing market data. The S&P energy index rose 0.4 per cent, in sync with a rally in Brent crude oil prices after a three-day slide. The S&P utilities index also gained 0.4 per cent.

“What’s happening in the market is ‘What’s next?’” said John De Clue, global investment strategist at US Bank, in Minneapolis. “It’s a classic tug of war between indicators that things are improving and, on the other hand, some things appear to be a little more troubling.”

Several economic indicators painted a sobering picture of the global economy. US manufacturing closed out its weakest quarter in three years this month, and the number of Americans filing new claims for jobless benefits held near two-month highs last week. The US data followed disappointing manufacturing reports from Europe and China.

In a bright spot for the market, Trulia surged 41.2 per cent to close at $24 in its market debut, as investors bet an improvement in the housing market would benefit the online real estate listing service. At its session high, Trulia’s stock touched $25.20 - up 48.2 per cent from its initial public offering price of $17.

The Dow Jones industrial average rose 18.97 points, or 0.14 per cent, to close at 13,596.93. The Standard & Poor’s 500 Index dipped 0.79 of a point, or 0.05 per cent, to 1,460.26. The Nasdaq Composite Index fell 6.66 points, or 0.21 per cent, to close at 3,175.96.

After the bell, shares of Oracle slipped 0.53 per cent to $32.09 after the company reported that quarterly hardware sales tumbled 24 per cent from a year earlier as the technology giant continued its struggle to turn around the computer division it acquired with its purchase of Sun Microsystems. In regular trading, Oracle closed at $32.26, down 1.6 per cent on Nasdaq.

The benchmark Standard & Poor’s 500 Index has gained 5.9 per cent since the beginning of August, driven higher mostly by expectations of more stimulus from central banks. A week ago, the Federal Reserve announced its third round of stimulus or quantitative easing, known as QE3, helping push stocks up last Friday within reach of five-year highs.

In a sign of bullishness, UBS raised its target level for the S&P 500 by the end of 2012 to 1,525 from 1,375 yesterday.