Aug 24, 2009

New US economic data set to test Wall Street bull run

New US economic data in the coming week will test the resilience of Wall Street US shares scaled fresh highs for the year on upbeat remarks by Federal Reserve chief Ben Bernanke and buoyant housing data.

All three major market indexes were resting at new 2009 peaks at the end of trading Friday, buoyed by a record jump in existing-home sales in July and Bernanke's comments that recovery prospects "appear good" in the near term for the United States and the rest of the world after the worst slump in six decades.

The blue-chip Dow Jones Industrial Average was up 184.56 points or 1.9 per cent for the week to finish at 9,505.96 on Friday. The blue-chip index had not finished above 9,500 since early November and has now climbed about 45 per cent from its March low.

The tech-heavy Nasdaq composite leapt 35.38 points (1.7 per cent) to 2,020.90 and the broad-market Standard & Poor's 500 index advanced 22.04 points (2.1 per cent) to 1,026.13 - the third consecutive weekly close atop the millennium level.

Analysts said new data next week, including a second preliminary estimate of US gross domestic product (GDP) for the second quarter on Thursday, would be critical in guaging market resilience.

The initial estimate showed the US economy contracting 1.0 per cent in the April-June period following a severe 6.4 per cent contraction in the first quarter.

Most analysts expect the new estimate to show a greater contraction of 1.4 per cent.



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