Aug. 23 - Summary of business headlines: Stocks rally even as home sales pressured by rising interest rates; Ballmer exit plan sparks Microsoft rally; Facebook sets post-IPO closing high. Conway G. Gittens reports.
Wall Street was able to rise despite disappointing numbers from the housing sector: stocks seeing their first back-to-back gains since the beginning of the month. But the Dow is down three weeks in a row. The Nasdaq, however, gained 1.5 percent for the week. New home sales tumbled in July to their lowest in nine months, according to government data, and figures for the prior two months were downwardly revised. The weaker-than-expected reading could be the first sign that higher interest rates are dampening demand for real estate. That did not go over well with homebuilding stocks - as they fell swiftly and never recovered. But there could be an upside to the data. Some economists say the fall in sales could convince the Federal Reserve to wait before it starts slowing down bond purchases, since the recovery in housing has kept the economic recovery moving along. Microsoft CEO Steve Ballmer - announcing he will retire within the next year. Ballmer has been under increasing pressure after the Surface tablet failed to catch on, resulting in a $900 million charge last quarter. He's also been under fire for not quickly transforming Microsoft in a post-PC world. Shares of the tech giant closed at a one-month high. Speaking of highs...Facebook closed above $40 for the first time since its IPO last year. Traders pinning the rally on hopes the social network will continue to connect with users switching from traditional desktop and PCs to mobile gadgets. European shares finished Friday trade higher as Europe's leading economies show more signs of rebirth.