Markets gain modestly, U.S. housing data boosts Wall St.
By Chuck Mikolajczak
NEW YORK (Reuters) - World equity indexes advanced modestly on Monday as upbeat U.S. housing data helped Wall Street shrug off a weak manufacturing report, while the prospect of higher U.S. interest rates lifted the dollar for a third day.
U.S. equities rebounded as a report showed that U.S. homebuilder sentiment rose in August to its highest level in nearly a decade.
Earlier in the session, stocks had dropped as Empire State data showed August manufacturing activity in New York was at its weakest in years.
"The housing data was pretty good," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "It certainly didn't hurt the bullish tone to everything housing-related."
Minutes from the U.S. Federal Reserve's most recent policymaking meeting are due to be released on Wednesday. Investors await that document for clues on how soon the Fed may hike rates for the first time in nearly 10 years, with many analysts expecting such a move by the end of the year.
The expectations for an impending rate hike helped the dollar rise, as did reassurance from China fixing its yuan exchange rate slightly higher for a second straight day. The dollar index .DXY was up 0.3 percent.
Housing stocks advanced after the NAHB/Wells Fargo Housing Market index showed U.S. homebuilder sentiment rose in August to its highest since a matching reading almost a decade ago. The PHLX housing sector index touched an 8-1/2 year high of 248.03 and closed up 1.2 percent at 248.01.