Stocks post modest gains after big jump in home sales, report showing slower economic growth

Stocks hold on to early gains after housing data

NEW YORK — Stocks pushed higher for a third straight day after a report that home sales were surprisingly strong last month.

The National Association of Realtors said Tuesday that home resales jumped 7.4 percent in November, much more than the 2.5 percent increase expected. Sales were 44 percent above last year’s levels, and at their highest level in nearly three years. The improvement is due to an extraordinary amount of federal support that encouraged homebuyers to take advantage of big tax breaks.

The report offered the latest evidence that the economic recovery is picking up pace.

Stocks had been rising modestly prior to the report after the Commerce Department’s new reading on gross domestic product showed a growth rate of 2.2 percent in the third quarter. While that was lower than a previous estimate of 2.8 percent, investors found encouragement in the fact that the economy still grew during the period after a record four straight quarters of decline.

With economic data continuing to show improvement, many analysts believe the economy is on track for a better finish in the current quarter.

The Dow Jones industrial average rose 57.97, or 0.6 percent, to 10,472.11. The Standard & Poor’s 500 index rose 5.23, or 0.5 percent, to 1,119.28, while the Nasdaq composite index rose 13.53, or 0.6 percent, to 2,251.19.