Stocks edge higher on upbeat home sales; Dow on brink of 8th straight weekly gain

Stocks edge higher; Dow set for 8th weekly gain

NEW YORK — Stocks edged higher Friday as a strong report on new home sales was offset by mixed earnings reports. Greece’s decision to trigger a rescue package also kept the market in check.

The Dow Jones industrial average is on pace for its eighth consecutive weekly gain, which would be its best run since a similar streak ended in January 2004.

Stephen Carl, head of equity trading at The Williams Capital Group in New York, said momentum from the nearly two straight months of gains in stocks could be waning. “It’s been quite a run,” Carl said.

Analysts have been saying for weeks that the market could be primed for a pullback. The Dow is up nearly 8 percent over the past two months and stocks have been on a nearly unbroken path upward over that time. That kind of pattern leads analysts to believe that investors are becoming less discerning in their stock picking, leaving the market vulnerable if sentiment shifts for the worse.

“The market is trying to sort out how overbought it is,” said Nick Kalivas, vice president of financial research at MF Global in Chicago. “That’s left us in a choppy state.”

Sales of new homes jumped 27 percent in March, bouncing off a record low in February, the Commerce Department reported. It was the best month since July and the biggest monthly increase in 47 years. The gains were likely fueled by customers who are trying to qualify for federal tax credits that will expire at the end of this month.

Stocks got another dose of good news on the housing sector on Thursday, when the National Association of Realtors said sales of existing homes also rose last month.

Joe Heider, principal at Rehmann in Cleveland, said the home sales report is a strong indication that consumers are growing more confident about the economy.

“We’re seeing that people have the confidence to make the biggest purchase of their lives,” Heider said. “And that bodes well for the markets.”

Shares of homebuilders including PulteGroup Inc. and Lennar Corp. rose for a second day as hopes rose that the troubled housing sector may finally be on the mend. Housing has been one of the hardest-hit sectors in the economy, helping to the economy into recession in late 2007.

Gold and oil rose after the housing report, pushing shares of energy and materials stocks higher throughout the day.

In late afternoon trading, the Dow Jones industrial average rose 44.29, or 0.4 percent, to 11,178.58. The Standard & Poor’s 500 index rose 5.90, or 0.5 percent, to 1,214.57, while the Nasdaq composite index rose 6.08, or 0.2 percent, to 2,525.15.

The Dow had been up as much as 50 points after the home sales report. Before the report, major indexes had been slightly lower following mixed earnings from two Dow components and a report on durable goods orders. There was also skepticism that the latest effort to resolve Greece’s debt problems would work out in the long term.

Dow components Microsoft Corp. and Travelers Cos. both fell after their quarterly results failed to impress investors.

Travelers fell after its first-quarter profit missed expectations because of severe winter storms in the United States and the earthquake in Chile. Travelers fell 58 cents to $53.21.

Microsoft’s 35 percent jump in earnings wasn’t enough for investors. Investors were looking for bigger growth in corporate spending after other technology companies showed a big rebound in that area. Its shares fell 57 cents to $30.82.

The technology-heavy Nasdaq was being dragged down by a disappointing earnings outlook from Amazon.com Inc. Its shares fell $6.47, or 4.3 percent, to $143.62.

Homebuilders were the big gainers on the day. Pulte shares rose 73 cents, or 5.9 percent, to $13.21 cents. Lennar jumped 75 cents, or 3.8 percent, to $20.49.

About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 775 million shares, compared with 867.7 million traded at the same point Thursday.

In Europe, stock indexes rose after Greek officials said they would tap a rescue package from the 15 other countries that use the euro and the International Monetary Fund. The move gives Greece better interest rates on its debt than it would be able to get from private investors.

Many remained skeptical, however, if the bailout would provide a long-term solution to Greece’s debt woes. Investors also expect that other weak European countries such as Portugal may require help, further undermining confidence in the euro, Europe’s shared currency.

The dollar fell against the euro after rising earlier in the day to touch its highest level in a year.

Bond prices fell as investors moved into stocks. The yield on the benchmark 10-year Treasury note rose to 3.82 percent from 3.78 percent late Thursday.

The Russell 2000 index of smaller companies rose 4.40, or 0.6 percent, to 738.71.

Overseas, Britain’s FTSE 100 rose 1 percent, Germany’s DAX index gained 1.5 percent, and France’s CAC-40 rose 0.7 percent. Japan’s Nikkei stock average fell 0.3 percent.