US housing starts up, EU industrial production up, tech sales up

The US housing market continues to defy analysts with its strength. Reuters reports.

U.S. housing starts jumped 3.4 percent in September... The Commerce Department said housing starts increased to a 2.108 million unit annual rate in September, as construction on both single-family and multifamily units rose. That outpaced August's upwardly revised 2.038 million unit rate, which was originally reported at 2.009 million units... Permits for future groundbreaking, an indicator of builder confidence, jumped 2.4 percent to a 2.189 million unit pace -- the highest rate since a matching pace in February 1973.

Mortgage applications suggest that the housing market may continue to growth.

[T]he Mortgage Bankers Association said its index of mortgage loan application volume increased 6.1 percent to 737.5 last week despite an increase in borrowing costs on 30-year fixed-rate mortgages to 6.09 percent.

And the strength appears to extend to the US economy in general.

The Fed's "beige book" summary of economic conditions...said U.S. business activity increased across the country in September and early October, but hurricane damage weighed on some regions as high energy costs pushed up prices.

Several regions also reported input cost increases being passed through to retail prices, the Fed said, raising fears of broader inflationary pressures in the wake of Hurricanes Rita and Katrina.

Europe has also been doing quite well of late, with industrial production picking up.

Seasonally adjusted industrial production rose by 0.8% in the euro-zone in August 2005 compared to July. Production increased by 0.1% in July and by 0.5% in June. In the EU25 output rose by 0.3% in August 2005, after increases of 0.1% in July and 0.6% in June.

The strength in the global economy is showing up in corporate results, including those of technology companies, as BusinessWeek reports.

[T]ech-industry sales appear to keep humming along. Third-quarter reports from tech stalwarts point to seemingly insatiable demand for chips, PCs, servers, cell phones, and other consumer electronics.

There are clouds in the technology horizon though. The worldwide semiconductor-equipment book-to-bill ratio fell to 1.03 in September from 1.07 in August, according to VLSI Research Inc, and silicon foundry capacity is projected to be tight in 2006.

But for the moment at least, the world economy is looking wonderful again. At least, that seems to be what the market thinks, with US stocks jumping yesterday.

U.S. stocks rallied on Wednesday, pushing the S&P 500 to its largest point gain in almost six months... The Nasdaq ended with its biggest point gain in more than three months, while the Dow's triple-digit jump was its biggest point gain in about one month...

The Dow Jones industrial average gained 128.87 points, or 1.25 percent, to end at 10,414.13. The Standard & Poor's 500 Index rose 17.62 points, or 1.50 percent, to finish at 1,195.76. The technology-laced Nasdaq Composite Index climbed 35.24 points, or 1.71 percent, to end at 2,091.24.