US stock market rebounds

The US stock market yesterday more than erased the previous day's losses. Bloomberg reports:

U.S. stocks rallied, erasing yesterday's tumble, sparked by the biggest advance in U.S. Steel Corp. in seven years and falling oil prices...

The Standard & Poor's 500 Index added 28.83, or 2.3 percent, to 1,263.2, rebounding from a 1.9 percent slump yesterday. The Dow Jones Industrial Average gained 266.48, or 2.4 percent, to 11,397.56 after a 2.1 percent tumble yesterday. The Nasdaq Composite Index increased 55.4 to 2,319.62. More than four stocks rose for each that fell on the New York Stock Exchange...

Benchmark indexes extended gains after consumer confidence recovered in July from a 16-year low, sending the Conference Board's index to a higher-than-forecast reading of 51.9...

Crude for September delivery slid $2.54, or 2 percent, to $122.19 today in New York...

Stocks gained even after a private report said home prices in 20 U.S. metropolitan areas fell at a faster pace in May, indicating the three-year housing slump hasn't stabilized. The S&P/Case-Shiller home-price index dropped 15.8 percent from a year earlier, the biggest decline since records began in 2001, after decreasing 15.2 percent in April. The gauge has fallen every month since January 2007.

Meanwhile, the global economic environment remains highly uncertain. Economic data from Japan earlier yesterday showed its unemployment rate hitting a two-year high in June and household spending continuing to fall. AFP/CNA reports:

The jobless rate hit 4.1 per cent in June, the highest since September 2006, the Ministry of Internal Affairs and Communications reported. Markets had expected the jobless rate to remain unchanged at 4.0 per cent...

Meanwhile, household spending slipped 1.8 per cent in June from a year earlier, falling for a fourth straight month, the government reported. Household income dropped 2.1 per cent on average.

And some central banks are still raising interest rates. Again from AFP/CNA:

India's central bank on Tuesday raised its key short-term lending rate by half-a-percentage point in an aggressive bid to tame inflation riding at a 13-year high, pushing shares down sharply...

The repo rate was hiked by 50 basis points to 9 percent, while the cash reserve ratio – the sum banks must keep on deposit – was increased by a quarter point to 9 percent.