Business

Wall Street rises after strong US house sales in July

NYSE traders Image copyright Getty Images

(Closed): US markets closed modestly higher on Tuesday as positive housing data helped boost shares in the real estate sector.

The Dow Jones Industrial Average was up 17.88 points 18,547.30.

The wider S&P 500 rose 4.29 points to 2,186.90 and the tech-heavy Nasdaq index gained 15.47 points to 5,260.08.

Data on new homes sales in the US showed a sharp pick-up in July. Month-on-month sales increased 12.4%, the fastest growth since October 2007.

Construction of homes is also expected to increase to meet the growing demand. Shares in housebuilder Toll Brothers jumped 8.8%, and rival Lennar Corp rose 3%.

The growth in housing sales added to speculation about when the Federal Reserve will next raise interest rates.

Investors will be closely watching a speech by Fed chairwoman Janet Yellen on Friday. Ms Yellen will be speaking at Jackson Hole, Wyoming, during a meeting of global central bankers.

"It would be nice to see the economy pick up and be able to support higher interest rates. That would be a win for stocks," said Terry Morris, senior vice president and managing director of equities for BB&T Institutional Investment Advisors.

"If there is enough economic strength to support higher interest rates, that is the ideal scenario," he added.

Electronics retail chain Best Buy added more than 19.6% after announcing a 21% rise in quarterly profit.

"We saw continued positive momentum in our online sales,'' said Best Buy's chairman and chief executive, Hubert Joly. "We also continued to deliver cost savings and drive efficiencies in the business."