US stocks surged on Thursday, posting their second largest gain this year as fears of eurozone contagion receded and investors flocked back to riskier stocks, lifting shares of technology companies including Intel and Microsoft. American Express also jumped, boosted by an analyst upgrade.
Private new capital spending on buildings and equipment fell 0.2% to $27.7bn in the first quarter of 2010 from $27.75bn in the fourth quarter 2009, the Australian Bureau of Statistics said.
Spending rose 1% from the first quarter of 2009. A sixth estimate of expenditure shows companies expect to invest $108.7bn in the fiscal year ending June 30, 2010, a fall of 2.5% from the sixth estimate for 2008-09.
The second estimate for 2010-11 is $103.9bn, up 16.9% from the corresponding estimate for 2009-10.
The economy is set to continue to stand out on a global basis as economic growth increases to 3.25% in 2010 before accelerating to 3.5% in 2011, according to the Organisation for Economic Cooperation and Development.
The new outlook supports a further gradual tightening in interest rates. Managing the exit strategy from the crisis is less problematic in Australia than most countries, with recent tightening of monetary and fiscal policy a welcome development.
US stocks fell as worries about the global economy flared anew late in the session, overcoming an earlier rally that had been powered by encouraging US economic data. Microsoft, McDonald's and American Express were among the decliners.
For the first quarter, the value of building work completed in Australia rose 4.4% from the fourth quarter of 2009 to $19.81bn, the Australian Bureau of Statistics said. More broadly, the value of total construction, which includes building and engineering work, rose 1.9% from the previous quarter to $39.48bn. A quarter ago, posted 6.1% building work growth and 2.6% total construction growth.
While the chances of a housing collapse remain remote, a period of softer or stagnant house prices is likely this year, Moody's said. Noting declining foreign investor interest and tighter domestic policy, including six interest rate hikes from the Reserve Bank of Australia in its last seven meetings, the surging momentum in home prices last year is over.
An index of the economy grew at an annualised rate of 8.7% in March, up from 7.7% growth in February. The index of where the economy is headed in the next three to nine months is compiled monthly by Westpac and Melbourne University's Institute of Applied Economic & Social Research.
US blue-chip stocks fell on Tuesday, with Chevron and Exxon Mobil among the decliners as crude-oil futures slipped. But the broader Standard & Poor's 500 index edged into positive territory after materials companies including Alcoa and consumer-discretionary stocks such as Home Depot staged late rallies.
The Dow Jones Industrial Average fell 22.82 points (0.23%) to 10,043.75. With crude-oil futures falling to below $69 a barrel, Chevron lost 87 cents (1.2%) to $72.57, while Exxon Mobil slipped 48 cents (0.8%) to $59.71.
The government said it would buy residential mortgage-backed securities at tighter spreads in an effort to kick-start recently stalled issuance and help smaller lenders better compete on home loan origination with the ever-growing big banks. Since late 2007 the government has bought more than $8bn of mortgage-backed securities from home loan lenders to keep the securitisation market open and provide funding for smaller operators.
US stocks fell on Monday, led by financial stocks, including Bank of America, JP Morgan Chase and American Express, as the seizure of a Spanish bank reignited concerns about the euro zone's financial system, while investors continue to fret over the potential impact of a regulatory overhaul in the US.