12:25 PM New York – U.S. stocks shrugged off early weakness and rebounded after falling for three days in a row as lawmakers debate terms of debt ceiling limit. U.S. Treasury Secretary estimated government cash will drop to $50 billion in three weeks.
U.S. stocks rebounded from the early decline and home builders led the advance after new home sales and durable goods orders were ahead of estimates.
S&P 500 index increased 22.69 and the Nasdaq Composite Index added 1.59 to 1,698.42.
Market indexes fluctuated as U.S. senators debated the ways to limit the implement the healthcare law as the government released its plan to for online exchanges in 36 states.
The new health care exchanges are expected to attract as many as 20 million new customers as the government mandate and subsidized premium attract many previously uninsured.
U.S. Treasury Secretary Jack Lew said the government is expected to dip to as low as $50 billion as early as mid-October and said President Barack Obama will not negotiate with U.S. Congress in lifting debt ceiling from $16.7 trillion.
August New Home Sales Rise
New home sales in August rebounded after dipping in August, the Census Bureau said today.
Builders in the month sold 421,000 new homes, slightly lower than expected 425,000 annual rate of sales by several economists.
The sales in August increased 7.9% from the revised 390,000 rate in July and previous estimate for the month was 394,000.
The median price of homes sold declined to $254,000 from $257,000 in July and sales in southern U.S. rose the most by 15% or 32,000 from previous month. Sales in Midwest increased 10,000 to 61,000 but declined 15% in the western U.S.
Durable Goods Orders Inch Up 0.1%
Total orders for durable goods orders increased 0.1% to a seasonally adjusted $224.92 billion in August, the Commerce Department said today.
Orders for long lasting goods including items like furniture and washing machines that last at least three years were expected to decline 0.6% in the month.
The shipment for non-military capital goods other than aircraft increased 1.3%, after falling for two months in a row.
Durable goods orders in July were revised to a decline of 8.1% from the previous estimate of 7.4% fall.
New orders for computers and machinery increased but orders for electronics and appliances declined and for vehicles and motor parts gained 2.4%.
U.S. Stocks in Review
Carnival Corp (CCL
) declined 5% after falling more than 7.5% in yesterday’s trading and the cruise operator estimated an unexpected loss in the fourth quarter.
J.C. Penney (JCP
) dropped 13% to $10.21 after Goldman Sachs said weak company fundamentals, inventory rebuilding and weaker than expected sales in home furnishing “will likely challenge retailer’s liquidity in the third quarter.”