Gains on muted staging

 

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Positive economic data pushed U.S. stocks higher Wednesday for what is a rare event these day: Two consecutive days of gains.

Two consecutive days of anything is rare these days, not to put too fine a point on it. U.S. markets have see-sawed back and forth for a week or more, muting talk about a 10 percent correction, which looked to be the case in early February.

That's when macro-economic forces took over. Investors turned their attention to debt issues in Europe, which are mimicking a "Whack-a-mole" game … first Greece, then Spain, then Portugal. Others kept an eye on Asia, where it is "Opposite Day" in China, which is trying to slow its economy.

In the past 12 trading sessions seven have included 100 or more point swings in the Dow Jones industrial average, which added 40.43 points Wednesday or 0.39 percent to 10,309.24.

That puts the DJIA down 3.8 percent from its Jan. 19 high, leaving the question of a correction still up in the air.

Wednesday's news included a Federal Reserve Bank report that industrial production rose 0.9 percent in January with encouraging increases in manufacturing and a more predicable increase in utilities and mining.

Capacity utilization rose slightly to 72.6 percent, indicating factories are more than 25 percent below their potential. The Commerce Department, meanwhile, said housing starts rose 2.8 percent to a seasonally adjusted annual rate of 591,000 homes, a rate unmatched since September.

Moreover, Fed policymakers, in Open Market Committee meeting minutes from January, noted "a solid pace" of improvement in industrial production in the fourth quarter and a significant drop in the pace of announced job losses. "Some indicators suggested that the deterioration in the labor market was abating," the Fed said.

The Fed said the recovery was solid, but not spectacular, predicting 3.5 percent economic growth this year "with unemployment declining only gradually."

In basic terms, that means consumer spending and housing markets would remain slow, as the numbers are, in real life, customers that remain out of work. On the positive side, the Fed continues to predict inflation will remain manageable for the foreseeable future.

In international markets Thursday, the Nikkei 225 index in Japan rose 0.28 percent, while the Shanghai composite index in China added 1.09 percent. The Hang Seng index in Hong Kong lost 0.54 percent, while the Sensex in India lost 0.62 percent.

In Australia, the S&P/ASX 200 fell 0.28 percent.

In midday trading in Europe, the FTSE 100 in Britain rose 0.52 percent, while the DAX 30 in Germany added 0.3 percent. The CAC 40 in France rose 0.29 percent, while the pan-European DJ Stoxx 50 added 0.35 percent.