Housing stocks were among the day’s leaders following stronger-than-expected data on home sales. The PHLX housing sector index jumped 2.2 per cent, led by a 4.3 per cent advance in PulteGroup, the second-largest US home builder, to $16.43.
The pace of US home resales rose 7.8 per cent in August, the fastest in more than two years. Housing starts also climbed, a hopeful sign that a budding housing market recovery is gaining traction.
The reports came as investors looked for improving economic data to help bolster a rally of 5.9 per cent in the S&P 500 since the start of August.
“The recent pullback in prices was all about healthy profit-taking after the big rally we had last week,” said Neil Massa, senior US trader at MFC Global Investment Management, in Boston. “Now people are buying.”
The Dow Jones industrial average rose 13.32 points, or 0.10 per cent, to end at 13,577.96. The Standard & Poor’s 500 Index added 1.73 points, or 0.12 per cent, to finish at 1,461.05. The Nasdaq Composite Index gained 4.82 points, or 0.15 per cent, to close at 3,182.62.
Last week, the S&P 500 reached its highest closing levels since December 2007 following a decision by the US Federal Reserve to launch a new round of economic stimulus. The market pulled back or ended flat for two days, causing some investors to get back into stocks that had lost ground.