All major U.S. financial indexes jumped on Tuesday morning following reports of improved consumer confidence and rising home prices.
The Dow Jones Industrial Average gained 53.72 points, or 0.40 percent, to 13,612.64 points. The S&P 500 rose 5827 points, or 0.40 percent, to 1,462.71. The Nasdaq was up 14.04 points, or 0.45 percent, to 3,174.82.
Consumer confidence rose to a seven-month high of 70.3, gaining nine points from 61.3 in August, according to the Conference Board. The result beat a Bloomberg forecast of 63.1.
“The Consumer Confidence Index rebounded in September and is back to levels seen earlier this year," said Lynn Franco, director of economic indicators at the Conference Board, in a statement. "Consumers were more positive in their assessment of current conditions, in particular the job market, and considerably more optimistic about the short-term outlook for business conditions, employment and their financial situation.”
The survey portion based on expectations rose to 83.7 from 71.1. The portion tied to labor market conditions rose to 50.2 from 46.5.
"Overall, while the sharp rebound in confidence is very encouraging it remains at a relatively depressed level, suggesting that consumption growth is likely to be a little better in the third quarter, but hardly spectacular." wrote Amna Asaf, an economist with Toronto-based Capital Economics, in a research note. The country's pre-recession consumer confidence average was 92.3.
The S&P/Case-Shiller Home Price Indices continued to improve in July. The 20-City Composite rose 1.2 percent on an annual basis, beating a Bloomberg forecast of 1.1 percent. The 20-City Composite previously gained 0.6 percent in June on an annual basis.
Geographic disparity remained, with hard-hit markets like Las Vegas and Atlanta still struggling amid high unemployment and foreclosures. But all 20 major cities reported monthly price gains for the third consecutive month.
“The news on home prices in this report confirm recent good news about housing," said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. Single-family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. All in all, we are more optimistic about housing."