Wall Street tried to resume it upward run on Tuesday, after taking in another round of “less bad” economic news — this time, from the slumping housing market.
Construction companies like KB Home, the Centex Corporation and Toll Brothers paced gains in the broader financial markets after the government reported that new-home construction in February rose 22 percent from January to a seasonally adjusted annual pace of 583,000. It was the biggest percentage gain since January 1990 and the first increase since April.
Economists had expected housing starts to decline slightly as home builders pulled back in the face of dwindling demand and competition from a flood of foreclosed properties.
In the last hour, the Dow Jones industrial average was up 131 points or 1.8 percent while the broader Standard & Poor’s 500-stock index was 2.4 percent higher. The technology-heavy Nasdaq gained 3.1 percent.
Crude oil settled at $48.89, up $1.54 a barrel in New York trading.
Stocks ended just below the break-even point on Monday after four days of gains that had lifted the markets some 10 percent last week.
The government also said that wholesale prices in the United States edged up slightly in February, but flatter energy prices and the continuing global economic downturn kept any price increases to a minimum.
The Labor Department reported that its producer-price index rose by a less-than-expected 0.1 percent last month from January. The so-called core index, which excludes volatile food and energy costs, rose by 0.2 percent, a shade more than economists had expected.
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