Wall Street closed higher Wednesday as a mixed reading on the housing sector was offset by a jump in industrial output, a retreat in crude oil prices and new cash being injected into the stock market. The Dow Jones industrials rose 103 points to another closing record.
Stocks slipped early in the session after US Commerce Department data showed applications for building permits fell by the biggest amount in 17 years during April. But they regained territory after a Federal Reserve report showed industrial output increased more than expected in April.
The Dow ended up 103.69 or 0.77% to 13,487.53, while the S&P 500 closed up 12.95 or 0.86% to 1,514.14 and ended at a new six-year high. The Nasdaq climbed 22.13 or 0.88% to 2,547.42.
NYMEX light crude oil for June delivery fell US 62c to settle at US$62.55 a barrel after the weekly inventories report showed a surprise rise in gasoline and crude oil stocks.
Falling oil prices gave a lift to airline stocks. United Airlines parent UAL Corp and Continental Airlines both rose 4%, while American Airlines parent AMR Corp gained 5%.
In other corporate news, Citigroup rose 4% after billionaire hedge fund manager Edward Lampert said he acquired more than 15 million shares of the financial services conglomerate.
And in another sign that liquidity is high and likely to keep buoying stocks, Warren Buffett's Berkshire Hathaway reported in a regulatory filing that it doubled its stake in Dow component Johnson & Johnson. Johnson & Johnson shares rose 2%.
Elsewhere, Bausch & Lomb rose 9.8% after private equity concern Warburg Pincus struck a deal to acquire the eye-care product maker, which has faced product recalls and accounting troubles, for about US$3.67 billion.
After the close, Hewlett-Packard reported quarterly earnings that slipped from a year earlier, but managed to top estimates by a slim margin. Shares rose 1% in extended-hours trading.
Among the tech shares, Applied Materials slipped 3% in active Nasdaq trading after it forecast flat sales and a 15% drop in orders in the current fiscal third quarter.
But Agile Software jumped 12.6% after agreeing to be bought by Oracle Systems for US$495 million, a 14% premium to Tuesday's close. Oracle stock edged 0.8% higher yesterday.
COMEX gold for June delivery fell US$13 to settle at US$661.50 an ounce.
In Europe, Britain’s leading share index ended lower after moving in and out of positive territory on Wednesday, supported by M&A activity. But the market turned lower after the Bank of England's quarterly inflation report indicated that borrowing costs would probably need to rise once more in the next few months.
InterContinental Hotels topped the FTSE leader board, climbing 8.4% despite saying that it was not in talks about a takeover of the group.
Among the big miners, Rio Tinto was up 2.6% as traders said further talk of bid speculation was boosting its shares.
On the downside, clothing retailer Next dipped 6.4% after it reported a deterioration in underlying like-for-like sales at its shops and remained cautious about the outlook for consumer spending.
Shares in Land Securities lost 4.1% as it reported a 14.1% rise in quarterly net asset value but confirmed growth in the investment property market was slowing.
Electricals retailer DSG International fell 2.2% after saying its annual underlying profit would meet forecasts but that it would take a one-off charge of up to US$396 million.
The FTSE 100 closed 9.1 or 0.1% lower at 6,559.5.
On the other side of the channel, share prices in Paris closed lower as investors remained cautious ahead of a public holiday. Shares in Frankfurt also closed lower in quiet pre-holiday trade, with several DAX issues trading ex-dividend.
Credit Agricole was the biggest faller in France, dropping 4% after reporting a below-consensus underlying net profit of 1.181 billion euro.
Infineon was the main laggard in Germany, easing 3.2%, while BMW was second worst performer with a loss of 1.8% as it traded ex-dividend.
The French CAC-40 finished down 31.85 or 0.53% at 6,017.91, while the German DAX-30 lost 24.10 or 0.32% to 7481.25.
In Asia, Japan’s Nikkei average edged higher on Wednesday as shares of Hitachi rebounded after the electronics conglomerate said it would return to profit this year.
Hitachi shares closed up 2.1%. The company posted a large loss on Wednesday on its struggling hard drive and thermal power plant units, but the deficit was smaller than expected and it forecast a return to profit this year as it cuts costs.
The Nikkei closed up 16.02 or 0.09% at 17,529.00.
Hong Kong share prices closed higher as some China-related stocks bounced back from Monday's fall and tracked the rise in Chinese mainland markets. Previous decliner China Mobile gained 1%.
The Hang Seng closed up 69.11 or 0.33% at 20,937.26.
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