[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange closed higher amid strong economic indicators. Coupang surged nearly 10% on expectations that the logistics center fire could act as a positive catalyst.
On the 29th (local time), the Dow Jones Industrial Average rose 9.02 points (0.03%) to close at 34,292.29, the S&P 500 index increased 1.19 points (0.03%) to 4,291.80, and the Nasdaq index gained 27.83 points (0.19%) to finish at 14,528.33.
The S&P 500 index rose for the fourth consecutive trading day, while the Dow only partially recovered from the previous day's losses. The Nasdaq index rose for the second consecutive day.
The housing price increase announced that day further raised the possibility of the Federal Reserve's asset purchase tapering.
The April National Home Price Index compiled by S&P CoreLogic Case-Shiller rose 14.6% compared to a year ago, marking the highest increase since statistics began in 1987. The index expanded its gains after rising 13.3% the previous month.
The housing price index for 20 major cities soared 14.9%, up from 13.4% in March. Cities such as Phoenix and San Diego saw increases exceeding 20%.
The rise in housing prices is increasing the likelihood that the Fed will reduce the scale of monthly purchases of mortgage-backed securities (MBS).
The Wall Street Journal reported the previous day that Federal Reserve officials are discussing a 'two-step tapering' of asset purchases, proposing to reduce MBS holdings first and more quickly due to concerns about overheating in the housing market.
On the same day, the yield on the 10-year U.S. Treasury bond remained below 1.5%.
CNBC reported an analysis suggesting that U.S. inflation has peaked. The expected inflation, indicated by the spread between Treasury yields and Treasury Inflation-Protected Securities (TIPS), stands at 2.45% for 5-year bonds and 2.33% for 10-year bonds, implying that the current surge in inflation is a temporary phenomenon.
The U.S. Consumer Confidence Index for June was also recorded at 127.3, marking the highest level since March 2020.
Bank stocks such as Wells Fargo, Goldman Sachs, and JP Morgan showed strength on news of dividend increases.
Moderna surged 5% following positive announcements regarding the vaccine's effectiveness against the COVID-19 Delta variant.
Coupang rose more than 10%, reclaiming the $40 level. Experts expect that if Coupang undertakes refinancing on loans secured by the completely burned-down Deokpyeong logistics center, it could actually reduce interest expenses.
West Texas Intermediate (WTI) crude oil closed at $72.98 per barrel, up 7 cents (0.1%), amid growing caution ahead of the OPEC+ meeting.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
