RTTNews - Following a choppy session, stocks ended Tuesday's trading on a positive note amid some late session buying interest. The major averages all finished in positive territory by moderate margins, building on yesterday's strong gains that helped the Nasdaq and S&P 500 cross key levels.

On the economic front, the National Association of Realtors released a report showing that pending home sales growth in June exceeded economist estimates by a wide margin. With the increase, pending sales rose for the fifth consecutive month.

NAR said its pending home sales index jumped 3.6 percent to 94.6 in June from an upwardly revised reading of 91.3 in May. Economists had been expecting a much more modest increase by the index of about 0.7 percent.

Earlier, the Commerce Department released a report showing that personal spending increased by slightly more than expected, while personal income fell by more than expected.

The report showed that personal spending rose 0.4 percent in June following a revised 0.1 percent increase in May. Economists had been expecting spending to increase by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.

At the same time, the Commerce Department said that personal income fell by 1.3 percent in June after increasing by a revised 1.3 percent in the previous month. The decrease compares to economist estimates of a 1.0 percent decline.

Subsequently, the report said that personal saving as a percentage of disposable personal income was 4.6 percent in June compared with 6.2 percent in May.

On the earnings front, Centex (CTX) was one of the few bright spots among a slew of disappointing results that included Pulte (PHM), D.R. Horton (DHI), Archer Daniels Midland (ADM) and Tenet Healthcare (THC), among others.

The major averages showed a notable upward move going into the close, climbing back above the unchanged line. The Dow closed up by 33.63 points or 0.4 percent at 9,320.19, the Nasdaq advanced by 2.70 points or 0.1 percent to 2,011.31 and the S&P 500 rose by 3.02 points or 0.3 percent to 1,005.65.

Sector News

Housing stocks turned in some of the day's strongest performances, with the Philadelphia Housing Sector Index posting a 2.4 percent gain on the day. The upward move was prompted by the day's promising housing data, helping the index to reach its best closing level in over nine months.

Commercial real estate stocks also saw notable strength, as reflected by the 5.4 percent gain posted by the Morgan Stanley REIT Index. The advance propelled the index to its best closing level in eight months.

Airline, banking and biotechnology stocks also saw considerable moves to the upside. While the NYSE Arca Airline Index and the Kbw Banking Index rose to fresh multi-month closing highs, the NYSE Arca Biotechnology Index also extended its recent gains, setting a historic high.

Meanwhile, weakness among oil service, steel and retail stocks limited the upward move by the markets. Notably, the S&P Retail Index and the NYSE Arca Steel Index moved off of their best closing levels in ten months.

Dow Components

Caterpillar (CAT) led the way higher in the Dow, with the construction equipment maker posting a 6.1 percent gain. With the gain, the stock ended the session at its best closing price in nearly ten months. The gain by Caterpillar came after the company said that its recent cost cuts and planning would boost its long-term profitability.

Bank of America (BAC) also rose, advancing by 2.1 percent on the day. With the upward move, the stock closed at its best level in nearly eight months.

While Travelers (TRV), Alcoa (AA) and JP Morgan Chase (JPM) also rose to fresh multi-month highs, shares of United Technologies (UTX), Merck (MRK), Cisco (CSCO) and Verizon (VZ) retreated by modest margins, limiting the gain by the blue chip index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished Tuesday's trading on a mixed note. Hong Kong's Hang Seng Index posted a loss 0.1 percent, while Japan's benchmark Nikkei 225 Index ended the session higher by 0.2 percent.

The major European markets closed modestly lower, with the French CAC 40 Index and the U.K.'s FTSE 100 Index both finishing lower by 0.2 percent. Meanwhile, the German DAX Index posted a more modest loss, falling by less than a tenth of a percentage point.

In the bond markets, treasuries saw notable weakness following the day's housing data. Subsequently, the yield on the benchmark ten-year note finished at 3.679 percent, posting a gain of 4.0 basis points on the day.

Looking Ahead

Looking ahead to Wednesday, traders will have a chance to react to earnings from Kraft Foods (KFT) and Electronic Arts (ERTS), which reported after the closing bell, while Devon Energy (DVN), Ralph Lauren (RL) and News Corp. (NWS) are among the slew of firms set to report tomorrow.

Aside from earnings, traders are also likely to keep an eye on private payroll processor ADP's monthly employment report, which is expected to foreshadow the government employment data due out on Friday.

The focus of the markets may also turn to weekly mortgage application data from the Mortgage Bankers Association, the Commerce Department data on factory orders for June and the Institute for Supply Management's report on service sector activity in July.

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