Stocks rallied on good economic news. At the close the Dow gained 213 points on heavy trading volume to close at 17,706.
The Commerce Department said that sales of single family new homes rose a stunning 16.6% in the latest reading blowing away estimates by such a margin that the economists who made them sought out therapy sessions, truck driving schools and seedy wharf side bars to wash away their shame with a good bottle of hooch. The percentage increase was the biggest since 1992 which was when George H.W. Bush was President and the Maastricht Treaty was signed forming the European Union. New Single family home sales make up 10% of the housing market and this latest reading increases the odds the Federal Reserve will increase rates in either June or July.
The good news on housing sent the prospects of a Fed rate hike up which strengthened the US dollar which threw cold water on the recent rally in gold. Gold closed the day off $23.80 an ounce to $1,227. Oil meanwhile continued to trade higher gaining 1.4% to $48.76 per barrel.
Coeur D'Alene, ID-based Hecla Mining announced an agreement to buy Spokane based Mines Management (ticker MGN) for cash and stock. Mines Management shares were up about 35% on the deal which gives Hecla ownership of a new and potentially lucrative silver mine currently under construction near Libby, Montana. Too bad the buyout wasn’t in cash, stock and gold!
I will be traveling to Boston on Thursday. Cleo will be in charge of the office.