U.S. stocks traded higher early Monday after an end-of-week sell-off inspired by the U.S. Fed’s decision to keep its target rate at near-zero over concerns about the global economy. Home resale data released Monday showed a softer-than-expected market for existing homes in August after hitting an eight-year high in July.
"Sales activity was down in many parts of the country last month -- especially in the South and West -- as the persistent summer theme of tight inventory levels likely deterred some buyers," the chief economist for the National Association of Realtors, said in a statement. "The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year."
Existing home sales fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million units. Analysts polled by Thomson Reuters had expected a drop of 1.3 percent to 2 percent for a rate of 5.52 million to 5.59 million.
The markets appeared to shrug off the data and traders sought to buy on Friday’s dip.
The Dow Jones Industrial Average (INDEXDJX:.DJI) gained 175.35 points, or 1.07 percent, to 16,559. The Standard & Poor's 500 index (INDEXSP:.INX) rose 19.33 points, or 0.99 percent, to 1,977. The Nasdaq composite (INDEXNASDAQ:.IXIC) advanced 44.92 points, or 0.93 percent, to 4,872. Europe’s major markets were headed toward ending the day in the green, led by France’s CAC 40, which was up 1.21 percent in afternoon trading.
All 10 major sectors were up in Monday morning trading, led by banks and technology stocks. Dow component Microsoft Corporation (NASDAQ:MSFT) was up 2 percent after receiving a bullish outlook from investment firm Pacific Crest that expects the Seattle tech giant to grow revenue more than expected in business software. Nike Inc. (NYSE:NKE) was up 1.6 percent ahead of the company’s fiscal first quarter earnings report on Thursday in which the company could report its first quarterly profit topping $1 billion. Asia’s two major exchanges, Japan’s Nikkei 225 and Hong Kong’s Hang Seng closed down 1.96 percent and 0.75 percent, respectively.
Oil prices rebounded Monday, too, shaking off last week’s jitters over the Fed’s decision. West Texas Intermediate crude, the benchmark for U.S. oil prices, gained 2.66 percent to $45.87 per barrel for October delivery on the New York Mercantile Exchange. On the London ICE Futures Exchange, Brent crude for November advanced 1.77 percent to $48.31 a barrel.