Stocks climb as homebuilders rally on upbeat data
U.S. stocks advanced on Monday as investors considered economic reports on manufacturing and housing three days before the Federal Reserve releases minutes from its July meeting.
"This week we'll get to see what was on the Fed's mind in July, as their minutes are released," Paul Nolte, senior vice president, portfolio manager at Kingsview Asset Management, emailed. "They will be closely analyzed for indications of the next rate hike that is seen as most likely in September."
After advancing 0.7 percent last week, the Standard & Poor's 500 index (spx) rose nearly 11 points, or 0.5 percent, to 2,102 by the close. The Dow Jones Industrial Average (dji) rose 68 points, or 0.4 percent, to 17,545. The Nasdaq Composite (comp) added 43 points, or 0.9 percent, to 5,092.
A report from the Federal Reserve Bank of New York indicated factory activity in the New York region slid at its most rapid pace since the last recession. The gauge known as the Empire State index dropped to minus 14.9 in August, its lowest since April 2009, from 3.9 the previous month.
Stocks reversed course, however, after a separate report had confidence among U.S. homebuilders rising in August to their loftiest level in nearly a decade, illustrating improvement in the residential real estate market.
DR Horton (DHI) and KB Home (KBH) were among the homebuilders rallying in the wake of the report.
The data come amid expectations that there is at least a 50 percent chance that the Fed will increase benchmark interest rates next month.