NEW YORK (AP) — Wall Street rose modestly yesterday, securing the Dow Jones Industrial Average’s best week in four years after a surprise jump in home sales eased concern that frailty in the housing market will hurt economic growth.
Existing home sales rose by the biggest amount in nearly three years in February with a sharp increase in sales in the Northeast, the National Association of Realtors said. The 3.9 percent increase was the largest since a similar jump in March 2004. Analysts had been expecting a decrease.
Still, the report did have some downbeat aspects — the median price of a home fell year-over-year for the seventh straight month and inventories rose.
“People are realizing the housing market is bottoming and is not going to cause a recession in 2007,” said Noman Ali, U.S. equities portfolio manager at MFC Global Investment Management. “The consumer is really the main driving force of the economy and the consumer remains strong.”
The Dow rose 19.87, or 0.16 percent, to 12,481.01. The blue-chip index rose for five straight sessions, picking up 370.60 for its biggest weekly point gain since March 2003; that translated to a 3.06 percent rise for the week.
Broader stock indicators also closed higher. The Standard & Poor’s 500 Index advanced 1.57, or 0.11 percent, to 1,436.11, and the Nasdaq Composite Index rose 4.44, or 0.18 percent, to 2,456.18. The Russell 2000 Index of smaller companies rose 1.46, or 0.18 percent, to 809.51.
For the week, the S&P 500 rose 3.54 percent and the Nasdaq gained 4.52 percent.
Bonds fell following release of the housing data. The yield on the benchmark 10-year Treasury note rose to 4.61 percent from 4.58 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude settled up 54 cents at $62.23 per barrel on the New York Mercantile Exchange. Oil prices rose following word that Iranian naval vessels had detained 15 British sailors and marines.
Examining the week’s trading, Ed Hyland, global investment specialist for JPMorgan Private Bank, said it is a “good sign” that the market hasn’t given back its gains.
“I think it’s just that the market is continuing to digest the rally that it had,” he said, though he noted Wednesday’s advance, which included a 159-point jump in the Dow industrials, was perhaps overwrought.
Mr. Ali contends that if concerns about the housing sector moderate somewhat, Wall Street will likely turn its attention in the coming weeks to forecasts about quarterly results. “It’s going to be confession season going into first-quarter earnings.”
Germany’s DaimlerChrysler AG jumped to a fresh 52-week high with speculation that a Canadian auto supplier, along with a private equity company, planned to make a bid for the company’s struggling U.S. Chrysler division. DaimlerChrysler jumped $4.76, or 6.1 percent, to $82.36. The stock traded as high as $82.93, eclipsing an earlier 52-week high of $77.99.
General Motors gave a sizable boost to the blue chips with enthusiasm over the potential Chrysler bid and after the world’s largest automaker announced stock-option grants to executives that are tied to the company’s performance. GM rose $1.67, or 5.5 percent, to $31.99.
Verizon, also a Dow component, rose 11 cents to $38.12 after a federal judge issued a permanent injunction against Internet phone company Vonage Holdings Corp. for use of Verizon’s patents. Vonage fell 26 cents, or 6.4 percent, to $3.79.
Amgen Inc. fell $2.45, or 4.1 percent, to $58.02 after the company halted a trial of colon cancer drug Vectibix. In the trial, the product hastened the development of colon cancer when used in combination with Avastin.
Label maker Avery Dennison Corp. agreed to acquire Paxar Corp., a maker of tags, labels and apparel identification products, for about $1.34 billion. Avery Dennison rose 88 cents to $66.43, while Paxar surged $4.52, or 18.8 percent, to $28.55.
Advancing issues narrowly outnumbered decliners by 3 to 2 on the New York Stock Exchange, where volume came to 1.39 billion shares, down from 1.62 billion Thursday.
Japan’s Nikkei stock average closed up 0.35 percent, Hong Kong’s Hang Seng Index edged up 0.01 percent and the Shanghai Composite Index advanced 0.10 percent, closing at a record high for the third straight day.
Britain’s FTSE 100 ended up 0.34 percent, Germany’s DAX gained 0.61 percent, and France’s CAC-40 added 0.65 percent.
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