Wall Street - buoyed earlier by the Federal Reserve's low US interest rate policy and durable goods and jobless benefit claims - has now come off its best levels.
New home sales data has proved disappointing, showing a 2.2% month on month fall in December. Teunis Brosens of ING Bank said:
Sustained improvements in homebuilder sentiment had suggested a pickup in sales. Today's report brings total sales in 2011 to 303,000, the worst on record (since 1963). The second and third worst years were 2010 and 2009, respectively.
Today's report serves as a reality check after the recent run of upbeat housing data. The failure of new home sales to pick up shows that while the housing market may slowly be recovering, the road to normality will be very long. The housing recovery is fragile, and can only become sustained if jobs creation accelerates. Even then, too much fiscal retrenchment and negative spillovers from Europe still have the potential to throw the revival of housing and the US economy in general off course.
So the Dow Jones Industrial Average is up just 19 points, having earlier climbed more than 80 points. The FTSE 100 is up 57.69 points at 5780.69, recovering from two days of falls while European markets are higher on hopes of a resolution to Greece's talks with its private bondholders.
