US stocks rise on housing construction figures

March 18th, 2009 - 6:16 am ICT by IANS  

New York, March 18 (DPA) US stocks rose Tuesday as the construction of new houses in the United States unexpectedly surged in February and investors speculated about Federal Reserve efforts to bolster the economy.

Privately owned housing starts in February were 583,000 at an annual rate, up 22 percent from January but still down 47.3 percent from the same month in 2008, the Commerce Department said. Economists had expected a further monthly decline to 450,000 last month, according to a Bloomberg News survey.

The US Federal Reserve was meeting Tuesday and was widely expected to keep interest rates steady in the range of zero to 0.25 percent when it releases its periodic decision Wednesday. The central bank could also expand its purchases of asset-backed securities and treasury bills with an ultimate goal of freeing up more credit lines.

The Fed has been working to revive borrowing and stabilize the financial system amid a serious ongoing recession in the United States, which has cascaded into foreign markets.

“There’s a feeling that maybe the economy has hit the bottom,” Chip Hodge of MFC Global Investment Management told Bloomberg financial news. “For the first time in a while we aren’t looking at mostly negative headlines.”

The blue-chip Dow Jones Industrial Average gained 178.73 points,or 2.5 percent, to 7,395.7. The broader Standard & Poor’s 500 Index earned 24.23 points, or 3.2 percent, to 778.12. The technology-heavy Nasdaq Composite Index picked up 58.09 points, or 4.1 percent, to 1,462.11.

The US currency dropped against the euro to 76.85 euro cents from 77.08 euro cents on Monday. The dollar rose against the Japanese currency to 98.63 yen from 98.25 yen.

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