Housing data and earnings lift Wall Street

US stocks were higher on Thursday after some positive housing data surprised investors and an array of upbeat earnings helped to dispel concerns about the economy.

But a $7.9bn writedown at Merrill Lynch and Bank of America’s decision to cut 3000 jobs continued to weigh on sentiment.

Less than an hour after the opening bell the S&P 500 was up 0.3 1520.73 while Dow Jones Industrial Average was also up 0.3 per cent at 13720.85. The Nasdaq Composite was 0.2 per cent higher at 2780.37.

After a weak opening, stocks rallied higher after new home sales recorded an unexpected gain in September.

According to the Commerce Department sales of new homes rose 4.8 per cent to an annual rate of 770,000, compared with a decline of 2.5 per cent predicted by analysts.

But the figures were cushioned by a downward revision of the previous month’s figures to an 11-year low of 735,000. New home sales remain 23.3 per cent lower than a year ago.

The S&P homebuilder index gained 1.8 per cent at 418.48. Pulte Homes gained 2.6 per cent in spite of posting a $787.9m loss in the third quarter as it took a $1.18bn charge to reflect the declining land values.

Housing data and earnings lift Wall Street

Financial Times
10/25/2007 8:11:20 AM