Investors looked past a drop in consumer confidence and pushed markets up as the housing market showed some sign of strengthening.
The U.S.-centric S&P Retail Index rose 1.4 percent, or 8.66 points, to 608.95 as markets settled, and the Dow Jones Industrial Average increased 0.3 percent, or 32.16 points, to 12,534.82.
Shares of Pacific Sunwear of California Inc. jumped 10.3 percent to $1.60 after it was revealed in a Securities and Exchange Commission filing that director Brewer Brett purchased 23,000 shares of the firm since Sunday at prices ranging from $1.46 to $1.56 a share.
Also gaining were Tilly’s Inc., up 6.8 percent to $16.05; Sears Holdings Corp. 5.6 percent to $55.28, and Michael Kors Holdings Ltd., 3.4 percent to $44. In the media world, shares of News Corp. had their best day since August, jumping 8.5 percent to $21.79 on word that the company’s entertainment and publishing businesses could separate.
Home prices rose 1.3 percent in April, snapping a seven-month string of declining prices, according to the S&P/Case-Shiller Home Price Indices.
Even so, the stock increases didn’t jive with the latest reading of the Conference Board’s Consumer Confidence Index, which fell to its lowest level since January this month, dropping to 62 from 64.4 in May. Economists were expecting a milder drop to 63.2.
Yinbin Li, principal economist at forecasting firm IHS Global Insight, said, “Consumer confidence is digging deeper into recession territory as many Americans see their job prospects dim, their household net worth take a beating, and the European debt crises send jitters through the equity markets.”
In Europe, investors continue to be skeptical that a European Union summit later this week would produce a solution to the region’s debt crisis. According to published reports, Germany’s chancellor Angela Merkel once again rejected the idea of euro bonds, which would be backed by the whole currency bloc and could be used to buttress weaker countries.
The FTSE MIB in Milan closed down 1.1 percent to 12,968.18, while the CAC 40 in Paris fell 0.3 percent to 3,012.71 and the FTSE 100 in London dipped 0.1 percent to 5,446.96. Frankfurt’s DAX bucked the trend and gained 0.1 percent to 6,136.69.
The day’s decliners included Ferragamo, which finished down 2.3 percent to 15.90 euros; Yoox, 1.7 percent to 11.21 euros, and Tod’s, 1.9 percent to 76.20 euros.
Among those managing to post gains were Inditex, up 0.6 percent to 77.65 euros; LVMH Moët Hennessy Louis Vuitton, 0.8 percent to 115 euros; L’Oreal, which 0.5 percent to 88.01 euros, and Hermès, up 0.5 percent to 248.90 euros.
The pound traded for $1.56 Tuesday while the euro traded for $1.25.