US shares edge up on home sales data

NEW YORK: Wall Street stocks maintained upward momentum Tuesday a day after a sizzling rally as data showed pending home sales for April far better than expected. The Dow Jones Industrial Average rose 19.43 points (0.22 per cent) to end at 8,740.87, after posting on Monday the highest close for blue chips since early January.

The Nasdaq added 8.12 points (0.44 per cent) to 1,836.80 and the broad Standard & Poor’s 500 index climbed 1.87 points (0.20 per cent) to 944.74.

Trading was choppy as profit-taking by investors on the back of the market’s recent strong rally “conflicted” with a surprisingly strong housing report, analysts at Charles Schwab & Co said. The National Association of Realtors’ index for pending sales of previously owned homes on Tuesday posted an increase for the third straight month in April.

According to the latest data, April pending home sales spiked 6.7 per cent month-over-month from 3.2 per cent in March and above the 0.5 per cent increase that was expected by most analysts.

“On the face of it this is very good news, though the relationship between the pending sales index and actual sales has been much less robust since the Lehman failure,” said Ian Shepherdson, chief US economist for High Frequency Economics.

Investment bank Lehman’s collapse in September marked the height of financial turmoil that resulted from a home mortgage meltdown. -- AFP