Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.Launch Radio player
Wall Street climbed amid better-than-expected confidence among US home builders and a bidding war over Family Dollar Stores.
A report showed the National Association of Home Builders/Wells Fargo Housing Market index, a gauge of home builder confidence, rose to 55 in August from 53 in July, increasing for the third month in a row. It was a welcome sign of optimism in an industry that has struggled to recover.
"As the employment picture brightens, builders are seeing a noticeable increase in the number of serious buyers entering the market," NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware, said in a statement. "However, builders still face a number of challenges, including tight credit conditions for borrowers and shortages of finished lots and labour."
The data helped strengthen the greenback, which rose 0.3 percent against the euro and 0.2 percent against the yen.
Takeover activity, specifically a bidding war for Family Dollar Stores, also helped drive gains on Wall Street. Shares of Dollar General soared, last up 11.2 percent, after it offered to buy Family Dollar Stores, outbidding rival Dollar Tree. Shares of Family Dollar Stores jumped 5 percent. Shares of Dollar Tree were last down 2.1 percent.
"Dollar General can more easily justify a higher price because of the greater potential operating synergies," Erik Gordon, a professor at the University of Michigan's Ross School of Business, told Bloomberg News, adding that Dollar Tree may have incentive to come back with a counteroffer. "The acquisition would do more to transform Dollar Tree's business."
In late afternoon trading in New York, the Dow Jones Industrial Average climbed 0.99 percent, the Standard & Poor's 500 Index gained 0.77 percent, while the Nasdaq Composite Index rose 0.89 percent.
On Wednesday minutes of the latest US Federal Reserve meeting, held in July, will be released and scrutinised by investors for clues about the timing of a potential interest rate increase. Eyes will then turn to Fed Chair Janet Yellen's speech at the annual Jackson Hole, Wyoming global central bank gathering.
A drop in geopolitical tensions helped too. Gains in shares of United Technologies and Visa, up 2.1 percent and 1.9 percent respectively, led the Dow higher.
"The Fed remains accommodative, the economy is continuing to improve, and earnings are more or less not disappointing, which is all good news," Adam Sarhan, chief executive of Sarhan Capital in New York, told Reuters.
In Europe, the Stoxx 600 finished the session with a 1.2 percent advance from the previous close. The UK's FTSE 100 Index rose 0.8 percent, France's CAC 40 increased 1.4 percent, while Germany's DAX added 1.7 percent.
This article is tagged with the following keywords. Find out more about MyNBR Tags