Stocks rose on Monday, the first trading day after government data showed the economy added the largest number of jobs in three years, boosting hopes the recovery was gaining traction.
Underlying that view were separate reports showing the U.S. services sector, the largest segment of the economy, grew above expectations in March and pending homes sales accelerated more than anticipated in February.
U.S. homebuilders rose sharply and outpaced the wider market, with the Dow Jones home construction index <.DJUSHB> up 2.2 percent. The index was boosted by shares of PulteGroup Inc
Looks like the good news continues, said Alan Gayle, senior investment strategist at Ridgeworth Investments in Richmond, Virginia. Obviously the pickup in pending homes is very encouraging, though it's difficult to sort out the impact of the home buyer tax credit.
The Dow Jones industrial average <.DJI> gained 41.56 points, or 0.38 percent, to 10,968.63. The Standard & Poor's 500 Index <.SPX> rose 6.39 points, or 0.54 percent, to 1,184.49. The Nasdaq Composite Index <.IXIC> added 18.87 points, or 0.79 percent, to 2,421.45.
Nonfarm payrolls increased by 162,000 in March, Friday's report showed. That was below consensus, and many of the jobs were temporary, but more private-sector hiring was seen as further evidence the economy was on the mend. Markets were closed on Friday for the Good Friday holiday.
The Institute for Supply Management said its services index jumped to 55.4, its strongest reading since May 2006, from 53.0 in February. The National Association of Realtors monthly index of pending sales of existing U.S. homes rose 8.2 percent, when a flat reading was expected.
(Additional reporting by Ryan Vlastelica; Editing by Padraic Cassidy)