The National Association of Realtors said buyers stepped in to snap up properties at steep discounts in December, especially in the South and Midwest.
Heartening news on housing and corporate earnings are helping Wall Street to set aside some of its angst about the economy.
The Dow Jones industrial average and the Standard & Poor's 500 have had their first gains in three sessions.
The National Association of Realtors said Tuesday that buyers stepped in to snap up properties at steep discounts in December. And upbeat earnings reports from drugmakers Merck & Co. and Schering Plough pulled the market higher.
The Dow is up 141 at 8,078. The S&P 500 index is up 13 at 838. The Nasdaq composite index is finishing up 21 at 1,516.
Losing stocks outnumbered gainers by 3 to 2 on the New York Stock Exchange, where volume came to a light 1.34 billion shares. Encouraging news on housing and corporate earnings helped Wall Street set aside some of its angst about the economy Tuesday. Stocks were moderately higher.
The National Association of Realtors said buyers stepped in to snap up properties at steep discounts in December, especially in the South and Midwest. Its seasonally adjusted index of pending sales for preowned homes rose 6.3 percent to 87.7 in the final month of the year from an upwardly revised November reading of 82.5. The news is welcome on Wall Street where investors are looking for any signs that the housing industry slide is slowing.
"The market is encouraged by the more upbeat report on housing, albeit from a low level," said Alan Gayle, senior investment strategist at RidgeWorth Investments. "A key element of the current malaise is housing and credit-related. And the report on home sales suggests that we are making progress on that front."
Stocks also gained following several better-than-expected earnings reports. Homebuilder D.R. Horton Inc. reported a loss for its latest quarter that was narrower than analysts anticipated thanks to cost cuts. Drugmaker Merck & Co. posted a profit for the fourth quarter. The earnings topped analysts' expectations despite a decline in sales. Results from Schering Plough, another drugmaker, also came in ahead of estimates.
Not all earnings were stronger than expected, however. Mobile phone maker Motorola lost $3.6 billion. Analysts had been forecasting break-even results.
Financial stocks lagged the broader market Tuesday. PNC Financial Services Group Inc., one of the nation's largest banks, said it swung to a loss during the fourth quarter because of charges tied to its recent acquisition of National City Corp. Even excluding the National City costs, PNC's results fell short of analysts' expectations. The Pittsburgh-based bank also said it would cut 5,800 jobs following the purchase. PNC shares fell 13 percent.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 547.2 million shares.
Stocks ended mixed Monday, with the Dow and S&P lower and the Nasdaq higher. The indexes have fallen for four straight weeks due to growing worries about the economy. The Dow and S&P suffered their worst January ever — dropping more than 8 percent for the month.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.83 percent from 2.72 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.34 percent from 0.26 percent late Monday. The three-month yield is at the highest level since briefly going up to a half percent in December.
Gayle said investors are pleased to see the rise in the three-month yield because it suggests some fear is coming out of the market. Since last fall, investors have been pushing into T-bills looking for safety. They were willing to accept even the most modest of yields in return for protecting their money. Falling demand for T-bills suggests investors might be willing to take on more risk in areas like corporate debt and stocks.
"Investors are gradually putting money to work out there," Gayle said. "We're encouraged that although the economy has been beaten down very badly, that there are some signs of improvement."
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 60 cents to $40.68 a barrel on the New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average fell 0.62 percent. In afternoon trading, Britain's FTSE 100 rose 2.13 percent, Germany's DAX index rose 2.43 percent, and France's CAC-40 rose 1.79 percent.