Stock Market News for August 26, 2010

After skidding for four straight sessions, stocks staged a comeback yesterday even as economic data continued to paint a dismal picture. Disappointing housing and durable goods numbers sent stocks lower in the first hour of trading, with the Dow average plunging more than 100 points, but some bargain hunting towards the close helped stocks manage modest gains on the day.

The Dow Jones industrial average closed with a gain of 19.61 points, or 0.2% and the broader S&P 500 stock index added 0.3%. The tech-laden Nasdaq Composite index climbed 0.8% to 2141.54. On the New York Stock Exchange, three stocks advanced in price for every two that fell.

Improving risk sentiment sent crude prices up 89 cents to $72.52 even as a government report showed a greater-than-expected 4.1 million barrel build in crude oil stockpiles. The market’s measure of volatility, the CBOE Vix, fell 2.8% to 26.70. Treasuries lost some ground. The 10-year note dropped 14/32 in price as its yield jumped to 2.537%, well above Tuesday's nineteen-month low of 2.49%. The Treasury auctions $29 billion in 7-year notes today.

Although safe-havens lost some sheen, gold prices continued their recent advance, rising to an eight-week high of $1241.30. Shares in Barrick Gold (NYSE:ABX - Analyst Report) jumped 3.1% and Newmont Mining (NYSE:NEM - Analyst Report) gained 2.8%.

Homebuilder shares continued higher despite the dismal housing data as a number of brokerages suggested the sector was looking attractive. Home Depot (NYSE:HD - Analyst Report), a DJIA component, climbed 2% and was on top of the DJIA’s list of gainers. Shares in Toll Brothers (NYSE:TOL - Snapshot Report) jumped 5.8% after the firm returned to profitability. DR Horton (NYSE:DHI - Analyst Report) gained 4.6%. United Technologies (NYSE:UTX - Analyst Report) was the Dow’s leading decliner.

Shares in Asia and Europe rose today, drawing strength from yesterday’s advance in U.S. equity markets. Mining companies helped push Chinese shares higher. Meanwhile, a day after S&P downgraded Ireland’s credit rating to AA-, citing costs associated with bailing out the country’s financial institutions, a well-bid auction of Irish treasuries surprised many participants and helped send European shares higher today.

Read the full analyst report on ABX

Read the full analyst report on NEM

Read the full analyst report on HD

Read the full analyst report on TOL

Read the full analyst report on DHI

Read the full analyst report on UTX