Good housing news boosts Wall St

Traders Jeffrey Vazquez, left, and David O'Day work on the floor of the New York Stock Exchange. File photo / AP

A better-than-expected report on US housing bolstered Wall Street overnight, outweighing disappointing manufacturing data, and underpinning the focus on the minutes of the July Federal Reserve meeting, due to be released on Wednesday.

The National Association of Home Builders/Wells Fargo sentiment index rose to 61, the highest level in nearly a decade, up from 60 in July.

"Today's report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015," David Crowe, chief economist at NAHB, said in a statement. "Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year."

In late trading in New York, the Dow Jones Industrial Average rose 0.3 percent, the Standard & Poor's 500 Index increased 0.4 percent, while the Nasdaq Composite Index advanced 0.7 percent.

Gains in shares of UnitedHealth and those of Walt Disney, last up 2.3 percent and 1.7 percent respectively, helped propel the Dow higher.
Keeping a lid on gains was a separate report showing the Federal Reserve Bank of New York's Empire State factory index sank to minus 14.9 in August, the lowest level since April 2009.

"The manufacturing data did cause some weakness today because it adds to the uncertainty before the rate hike decision and since the global economy is showing varying degrees of growth," Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis, told Reuters.

Most analysts expect US policy makers to hike rates at their September meeting. Even so, the Fed guessing game will continue to weigh on Wall Street.

"We've reached a stalemate and we're not going to break out until we see something from the Fed," Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co in Milwaukee, told Bloomberg.

Goldman Sachs is extending that theme, with its chief equities strategist David Kostin saying he thinks the S&P 500 will trade in a narrow range from now through the rest of the year. He is expecting a rate hike in December.

Shares of Chevron posted the largest percentage decline in the Dow, down 3 percent, as oil fell on concern about weakening economic growth in some key economies such as China and Japan at a time of increased global oversupply in oil. US crude futures fell as low as US$41.64.

A report showed Japan's economy shrank in the second quarter, while last week's surprise decision by China to devalue its currency also remains a concern.

"The general talk in the market is about the continued ripple effect from the Chinese devaluation," David Thompson of Washington-based energy-specialised commodities broker Powerhouse told Reuters. "How it may affect other nations' economies linked to China."

In Europe, the Stoxx 600 Index ended the day with a 0.3 percent gain from the previous close. France's CAC 40 Index climbed 0.6 percent. The UK's FTSE 100 Index barely budged, closing 0.01 percent lower.
Germany's DAX Index fell 0.4 percent.