Energy stocks drove the gains with Cabot Oil (Gas), QEP Resources (QEP), and WPX Energy (WPX) leading the S&P. However, the energy sector continues to be the only sector negative for the year, at -6.8% from the start of 2012.
Financials, industrials and health-care stocks were also firm on a day of broad-based gains. However, Facebook (FB) fell 2.6% as many analysts at banks that underwrote its initial public offering last month began coverage of the Menlo Park, Calif., social-networking operator. The research was largely expected to be bullish, but “hold” ratings outnumbered the “buy” ratings.
The broad market gains came after a report on pending home sales in May topped expectations to match the highest level of the year, the latest in a string of signs of the housing market’s recovery. Also helping were strong earnings from homebuilder Lennar, LEN +4.75% which projected a slow and steady recovery in the housing market. Lennar rose 4.8% amid a broad rally in homebuilder stocks that included KB Home(KBH) and D.R. Horton (DHI).
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European measures moved higher. The Stoxx Europe 600 finished 1.4% higher and France’s CAC-40 index rose 1.7% to snap four-day losing streaks. Asian stocks finished Wednesday’s session mostly higher, led by a 1% rally by Hong Kong’s Hang Seng Index.
In other assets, crude oil futures gained 1.1% to $80.21 a barrel, while gold futures edged up 0.2% to settle at $1,577.50 an ounce. The U.S. dollar rose against the Japanese yen but fell against the euro. Demand for Treasurys edged up, sending the yield on the benchmark 10-year note slightly lower, to 1.619%.