Housing sector lifts U.S., European stocks; oil pares gains

Tue Aug 23, 2016 5:50pm EDT
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By Hilary Russ

NEW YORK (Reuters) - Homebuilders provided a modest lift to both U.S. and European stock markets on Tuesday, while oil prices got a brief boost from Iran's positive signals on an output freeze.

On Wall Street, technology companies led the Nasdaq to a record intraday high and robust housing market data strengthened the case for a firming economy.

Housing stocks jumped 2 percent after the Commerce Department reported new U.S. single-family home sales soared unexpectedly in July to near nine-year highs.

European equities rose 0.9 percent .STOXX, led by mining stocks, after data pointed to continuing gradual improvement in the region's economy.

Shares of the region's homebuilders also gained following a solid update from UK homebuilder Persimmon (PSN.L: Quote), which closed 4.2 percent higher and was the biggest riser on the blue-chip FTSE 100 .FTSE. The index closed at its highest level since the UK voted to leave the European Union.

The housing data helped traders fill the gap as markets await further clues on whether the Federal Reserve will raise U.S. interest rates this year. Global central bankers gather in the mountains of Wyoming later this week and investors are focused on a speech by Fed Chair Janet Yellen on Friday.

"If we continue to keep getting strong economic data it will become hard for the Fed to rationalize not hiking rates," said Erik Wytenus, global investment specialist at J.P. Morgan Private Bank in Palm Beach Florida.

The Dow Jones industrial average .DJI rose 17.88 points, or 0.1 percent, to 18,547.3, the S&P 500 .SPX gained 4.26 points, or 0.2 percent, to 2,186.9 and the Nasdaq Composite .IXIC added 15.48 points, or 0.3 percent, to 5,260.08.   Continued...

Traders work at desks on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 23, 2016.  REUTERS/Brendan McDermid