Housing data gives US markets a boost
US stocks rose for the fourth straight day yesterday as an upbeat report on sales of previously owned US homes bolstered hopes for an economic recovery.
But a sell-off in financials on worries about the dilutive impact of recent stock offerings limited a broad advance.
An index of pending sales of previously owned US homes shot up 6.7 per cent in April, the biggest monthly gain in seven-and-a-half years, according to the National Association of Realtors.
The data suggested that the recession is easing, and investors snapped up shares of home builders, with Toll Brothers rising nearly 4 per cent to $19.53, while DR Horton shot up 4.1 per cent to $9.63.
The Dow Jones home construction index was up 3.2 per cent.
Shares of big manufacturers also rose, with plane maker Boeing gaining 3.1 per cent and ranking among the Dow’s major advancers. Exxon Mobil, 3M, Coca-Cola and Alcoa also bolstered the blue-chip average.
“Some news is starting to come out that says things are stabilising and slowly starting to look better,” said Dan Faretta, senior market strategist at Lind-Waldock, a retail brokerage firm. “We’ve still got companies going under, filing for bankruptcy, and unemployment is continuing to rise…but we are starting to finally hit the bottom.”
The Dow Jones industrial average added 19.43 points, or 0.22 per cent, to 8,740.87. The Standard & Poor’s 500 Index gained 1.87 points, or 0.20 per cent, to 944.74.
The Nasdaq Composite Index rose 8.12 points, or 0.44 per cent, to 1,836.80.
For the S&P 500, the four-day advance represents the index’s longest winning streak since early April. However, trading was volatile, with indices swinging between gains and losses during the session.
The Dow industrials briefly turned positive for the year, rising as high as 8,787.13, before trimming gains.
The broader market came up against critical resistance a day after the S&P 500 hit a key technical milestone, finishing above its 200-day moving average for the first time since December 2007.