Stocks rise after encouraging reports on economy, Ukraine; Microsoft jumps

NEW YORK, N.Y. – The stock market rose Tuesday after some encouraging news on the economy and on hopes that the conflict between Russia and the West wouldn’t escalate further after Russia’s President Vladimir Putin said that it won’t take over other areas of Ukraine.

The Standard & Poor’s 500 index rose 14 points, or 0.8 per cent, to 1,873 as of 1:54 p.m. Eastern time. The Dow Jones industrial average rose 110 points, or 0.7 per cent, to 16,357. The Nasdaq composite climbed 51 points, or 1.2 per cent, to 4,331.

In a speech, Russian President Vladimir Putin told the Russian Parliament not to believe those who say that Russia will look to take over other areas of Ukraine. On Sunday, a majority of voters in Ukraine’s region of Crimea voted to break from that country and join Russia. Stocks fell last week as tensions rose between Russia and the U.S. and the European Union over the Ukraine.

“As long as Putin seems to be satisfied with what he has, that’s the key,” said Joe Quinlan, chief market strategist for U.S. Trust. “It gives the markets less to worry about in terms of an escalation of the crisis.”

The stock market is recovering this week after logging its biggest weekly drop in almost two months. The S&P 500 has gained 1.8 per cent so far this week after dropping almost 2 per cent last week on concerns about slowing growth in China and tensions between Russia and the West over Ukraine.

Microsoft jumped $1.57, or 4 per cent, to $39.62 after Reuters reported that CEO Satya Nadella plans to use his first big press event to unveil an iPad version of the company’s Office software suite. Analysts regard this as a first step for Nadella in repositioning Microsoft as a company that focuses on mobile devices rather than the shrinking market for personal computers.

Nasdaq OMX Group and IntercontinentalExchange Group slid following news that the New York Attorney General, Eric Schneiderman, was taking a closer look at services offered by stock exchanges to high-frequency traders. Schneiderman said that when exchanges allow trading firms to put their computers within the exchanges’ data centres, it gives these firms an unfair advantage. Nasdaq OMX lost $1.29, or 3 per cent, to $38.44. ICE lost $2.42, or 1 per cent, to $206.74.

Home builders rose after the Commerce Department said that applications for building permits reached their highest level in four months. Beazer Homes USA rose 74 cents, or 4 per cent, to $20.79 and Ryland Group rose $1.07, or 3 per cent, to $41.24.

The government reported that cheaper oil and gas kept U.S. consumer prices in check last month, despite a big rise in the cost of food. It was the latest sign of weak inflation. The Labor Department says the consumer price index increased 0.1 per cent in February. In the past 12 months, prices have risen just 1.1 per cent.

The Federal Reserve will start its second meeting of the year on Tuesday. The meeting will end Wednesday and be followed by an early afternoon press conference by Fed Chair Janet Chairman. Most analysts expect the Fed to continue to reduce its economic stimulus by cutting back on its bond purchases.

GameStop fell $1.59, or 4 per cent, to $38.16 after Wal-Mart said it plans to let video game owners trade in used games in Wal-Mart and Sam’s Club stores in exchange for store credit, not cash. Previously they offered trade-ins on a more limited basis online.

Hewlett-Packard rose $1.14, or 4 per cent, to $30.61 after analysts at Barclays upgraded their outlook on the hardware company and raised their price target on the stock to $38 from $33. They expect HP to return more cash to shareholders and gain market share in the server business from rivals in coming months.

In government bond trading, the yield on the 10-year Treasury note fell to 2.68 per cent. The price of oil rose $1.53, or 2 per cent, to $99.61 a barrel. Gold fell $13.90, or 1 per cent, to $1,359 an ounce.