US stocks rise after upbeat property data

MAJOR US stock indexes bounced back yesterday, but trading was light with the outlook clouded by doubts before yet another summit to tackle the European debt crisis.

US stocks partly recovered from losses of more than one per cent on Monday, led by housing shares after stronger-than-expected data on home prices.

The consumer discretionary sector was the top gainer on the S&P 500, followed by energy shares, which were boosted by a 2.3 per cent jump in Brent crude prices.

Traders remained cautious as Spanish short-term borrowing costs nearly tripled and US consumer confidence fell in June to its lowest level in five months.

“Certainly in the United States stocks are nicely priced, and for a long-term investor it is an attractive entry point, but then what about these macro risks hovering around the market? I think it’s having a dampening effect,” said John De Clue, global market strategist at US Bank’s wealth management group in Minneapolis.

Spanish 10-year bond yields rose after demand at a shorter-term bill sale fell despite significantly higher yields. Hopes faded that the European Union summit later this week would produce game-changing measures to ease the debt crisis.

Madrid has formally asked for funds to bail out its banks in a move some see as a prelude for a full-blown bailout of the Eurozone’s fourth-largest economy.

Rupert Murdoch’s News Corp said it was considering splitting into two publicly traded companies, and sources said publishing would be separated from entertainment. Shares jumped 8.3 per cent to $21.76 on volume of 73.1m shares, making it the Nasdaq’s most actively traded stock.

The Dow Jones industrial average rose 32.01 points, or 0.26 per cent, to 12,534.67. The S&P 500 Index gained 6.27 points, or 0.48 per cent, to 1,319.99. The Nasdaq Composite Index gained 17.90 points, or 0.63 per cent, to 2,854.06.

About 5.9bn shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE Amex, below the daily average of 6.82bn so far this year.

JPMorgan Chase & Co shares rose 1.1 per cent to $35.71 after Goldman Sachs added the bank to its conviction buy list. Morgan Stanley, cut to “neutral” by Goldman, added 0.2 per cent.

The PHLX housing index jumped 2.6 per cent after S&P/Case Shiller data showed home prices in 20 US metropolitan areas gained 0.7 per cent on a seasonally adjusted basis, topping economists’ expectations for a 0.4 per cent gain.

Facebook shares rose 3.2 per cent to $33.10 a day before the underwriters of its recent IPO are expected to release research on the company.

Advancing issues beat decliners on the New York Stock exchange by about nine to five.