Business

Home and car sales lift US stocks

House for sale in Virginia
Image caption The US housing market is continuing to recover

US stocks have risen strongly after a big increase in pending home sales and demand for cars lifted investor confidence in the US economy.

Pending home sales - deals agreed but not yet completed - rose 6% in April, said the main estate agent group, the National Association of Realtors.

Meanwhile, overall new car sales in the US were 19% higher in May than the same month last year.

Wall Street's main Dow Jones index ended Wednesday trading up 2.3%.

It finished ahead by 226 points at 10,250.

The index had closed on Tuesday down 1.1% after the announcement of a criminal investigation into UK oil firm BP hit the shares of US oil companies.

Although the level of April's pending home sales was helped by buyers wishing to conclude deals ahead of a tax change, the 6% increase was higher than the 4.3% rise expected by analysts.

Across the car industry, US sales at Ford were up 22% last month, while General Motors' added 17%.

However, Toyota's sales only rose 7% as it ended special offers introduced in March to woo customers who may have otherwise been put off by its mass car safety recalls.

"A positive housing report and better-than-expected auto sales are giving the stock market a lift," said Wells Fargo senior equity market strategist Scott Marcouille.

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