Choppy rise as data soothes crude spike

Small-cap stocks were modestly higher in choppy morning trade, as investors juggle several cross-currents, including a sudden jump in crude oil prices and a fresh batch of economic data that seemed slightly better than feared. At 10:06 a.m. ET, the Russell 2000 (NYSE:IWM) was up 3.49, or 0.48% at 724.03.

New Home Sales were pegged at an annual rate of 515,000 units, which was below the 530,000 forecast. The single-family home sales rate for June was the lowest since September 1991. Meanwhile, Consumer Confidence came in well above the forecast, with the headline figure at 56.9, compared with the projection of 53. The U.S. dollar edged slightly higher after the confidence report, but did not take out the overnight high against the euro.

The Case-Shiller Home Price Index was slightly better than the forecast, coming in at minus 15.9%, compared with the projection of minus 16.2%. In addition, the velocity of declines is slowing and there were some pockets that edged higher, which will foster some hope of a bottom for the beleaguered housing sector. Still, the report shows that home prices in metropolitan areas continue to fall at a record annual pace.

The U.S. dollar climbed to new move highs in overnight trading, pulling to the highest point since February against the euro. After this morning’s run of economic data, the dollar remained firm, which helped pull money into U.S. equities. In addition, the yield on ten-year notes and bonds was higher, suggesting money flow into stocks versus fixed income products.

Crude oil bounced about 30 minutes ahead of the U.S. stock market opening, boosted by concerns that Hurricane Gustav could trek toward key production areas in the Gulf of Mexico. The Gulf harbors about 25% of U.S. crude production and some 15% of natural gas production. Crude oil prices climbed back above $117 a barrel, . . .

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