U.S. equity markets ended Tuesday’s trading session on an up note, boosted by strength in housing and consumer confidence data.
The S&P/Case-Shiller index showed home prices rose in December, while the Consumer Confidence Index gained in February compared with January’s decline. Also, Federal Reserve Chairman Ben Bernanke told Congress Tuesday that economic growth has picked up this year, despite high levels of unemployment and fiscal uncertainty in Washington.
In testimony before the Senate Banking Committee, Bernanke said the economy has continued to “expand at a moderate if somewhat uneven pace.”
“The pause in real GDP last quarter does not appear to reflect a stalling-out of the recovery,” Bernanke told the committee, as he delivered the Fed’s semiannual monetary policy report to Congress. “Rather, economic activity was temporarily restrained by weather-related disruptions and by transitory declines in a few volatile categories of spending, even as demand by U.S. households and businesses continued to expand.”
He said the recent increase in gasoline prices is “hitting family budgets,” although overall inflation remains low. The Fed is anticipating the overall inflation rate will run at or below its 2 percent target in the medium term.
Bernanke defended the Fed’s $85 billion bond-buying program aimed at keeping interest rates low to spur economic growth.
“Notably, keeping longer-term interest rates low has helped spark recovery in the housing market and led to increased sales and production of automobiles and other durable goods,” Bernanke said. “By raising employment and household wealth — for example through higher home prices — these developments have in turn supported consumer sentiment and spending.”
The Dow Jones Industrial Average rose 0.8 percent to 13,900.13, while the S&P 500 Retailing Industry Group increased 1.5 percent to 692.47.
Among the retailers that posted gains were Christopher & Banks Corp., up 5.8 percent to $6.04, and Zale Corp., which rose 5.7 percent to $4.11. Other gainers include Stage Stores Inc., up 4.9 percent to $24.08, and Tiffany & Co., rising 3.1 percent to $66.01.
Elsewhere the major global indices posted a down day in their trading sessions.
The Nikkei 225 in Tokyo fell 2.3 percent to 11,398.81, while the Hang Seng Index in Hong Kong was down 1.3 percent to 22,519.69.
The FTSE MIB in Milan was down 4.9 percent to 15,552.20, while the CAC 40 in Paris sank 2.7 percent to 3,621.92. The DAX in Frankfurt fell 2.3 percent to 7,597.11, while the FTSE 100 in London retreated 1.3 percent to 6,270.44.
Italy’s two-day, parliamentary election ended with the center-left bloc winning the lower house, but failing to secure a majority in the Senate.
Control of both houses is needed to govern the country, which is mired in recession and pursuing a program of austerity measures. It is now up to the parties with the biggest majorities to form a coalition government, which will most likely be weak, or for the country to call a fresh round of elections.
Among the stocks that lost the most ground was Mulberry Group, which was down 3.4 percent to 13.52 pounds, following Panmure Gordon’s reiteration of its hold rating on the stock earlier this week.
PPR sank 2.8 percent to 166.95 euros; L’Oréal was down 2.4 percent to 111.95 euros; Inditex fell 2.5 percent to 101.05 euros; and Carrefour was down 2.6 percent to 20.30 euros.