Stocks Rise on Stronger US housing, Factory Data
A rare double shot of good news about the U.S. economy sent stocks strongly higher Tuesday. The Dow Jones industrial average rose 82 points despite lingering fear about Europe’s debt turmoil.
Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years, the National Association of Realtors said. The report was the latest signal that the housing market is improving in many regions following a slump of more than six years.
Homebuilders soared. Lennar Corp. had reported earlier that its second-quarter profit rose as deliveries and new orders increased. Its stock jumped $1.80, or 7 percent, to $29.19, the biggest gain in the Standard & Poor’s 500 index.
The ISE Homebuilders index rose 42 cents, or 4 percent, to $10.69. PulteGroup, D.R. Horton and Hovnanian Enterprises all rose sharply.
Earlier, the government said that businesses placed more orders for long-lasting manufactured goods in May, suggesting that their confidence in the U.S. economy was not shaken by signs of weakness that emerged this spring. Core goods, a measure of business investment plans, also jumped.
The reports offered a rare glimpse of good news about the U.S. economy, which continues to recover slowly despite three months of weak output and abysmal job growth. They "were really quite good," said Dennis Gartman, an economist and editor of The Gartman Letter, a source of daily market commentary.
"The economy is doing reasonably well and will continue to muddle on through," Gartman said.