Despite coming off of the best levels of the day as key areas of contention of the Treasury’s plan to instill confidence in the financial markets continued to be hammered out, stocks finished solidly higher as the bailout plan received fundamental approval.
The Dow Jones Industrial Average advanced 197 points (1.8%) to close at 11,022, the S&P 500 Index rose 23 points (2.0%) to 1,209, and the Nasdaq Composite gained 31 points (1.4%) to 2,187. Crude oil rose $2.29 to $108.02 per barrel, and gold lost $13.10 to $881.90 per ounce.
Durable goods orders fell 4.5% in August, well below the estimate of a 1.9% decline. Ex-transportation, orders fell 3.0%, more than the forecast of a 0.5% drop. Orders for non-defense capital goods ex-aircraft dropped 2.0%. Weakness last month may be a sign that sales overseas, which had helped to offset weakness in housing and autos, may be coming under pressure amid the economic slowdown that is spreading around the globe. Growth in Japan has been weak, and Europe appears to have entered a recession.
New home sales fell 11.5% in August to an annual rate of 460,000, well short of the estimate of a 1.0% decline to 510,000. The supply of homes based on sales rose from 10.3 months to 10.9 months.
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