US stocks climb on gains in durable goods, home sales

March 26th, 2009 - 6:19 am ICT by IANS  

New York, March 26 (DPA) US stock indices made gains Wednesday after government figures showed demand is rising for long-lasting goods and housing.
Durable goods orders increased 3.4 percent in February, and purchases of new homes jumped 4.7 percent, adding to a spate of slightly more positive economic news coming out of the US in the last week.

The blue-chip Dow Jones Industrial Average rose 89.84 points, or 1.17 percent, to 7,749.81, rallying during the final hour from a more than 100-point drop earlier in the afternoon.

Stocks had taken a dive after an auction of $34 billion in US government debt resulted in higher yields than expected. Investors have flooded Treasury securities over the past months as the only safe option in the current recession.

The Federal Reserve last week said it would buy $300 billion in long-term Treasury securities in an effort to drive down yields and push investors back into the private market.

The broader Standard & Poor’s 500 Index rose 7.76 points, or 0.96 percent, to 813.88, led by banking shares. The technology-heavy Nasdaq Composite Index rose 12.43 points, or 0.82 percent, to 1,528.95.

It was a topsy-turvy morning for currency markets, after Treasury Secretary Timothy Geithner said the US was “quite open” to expanding the International Monetary Fund’s special drawing rights, a currency unit that China has suggested could be a first step toward replacing the dollar as the world’s primary reserve currency.

The dollar fell as much as 1.3 percent against the euro but rallied as Geithner was asked to “clarify” his remarks later at the same New York conference. Geithner said he expected the dollar would “remain the world’s dominant reserve currency … for a long period of time”.

The US currency plummeted against the euro to 73.62 euro cents from 74.25 euro cents Tuesday and fell to 97.54 Japanese yen from 97.9 yen.

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