Wall Street gained momentum on Thursday, with the Nasdaq up about 1 percent before a key vote in Congress on a plan to prevent a U.S. default.
Stocks got an early lift from strong pending U.S. home sales data and a dip in jobless claims, a day after Wall Street recorded its biggest fall in eight weeks.
Uncertainty over Washington's ability to agree on a plan to reduce the U.S. budget deficit before an August 2 deadline has kept investors nervous about the possibility of a debt default or a U.S. credit ratings downgrade.
A bill to cut the U.S. deficit and raise the debt limit is expected after the close of trading on Thursday. House of Representatives Speaker John Boehner is pushing to pass a bill in the Republican-majority House, while the Democratic-controlled Senate is crafting a competing bill.
The prospects for this market right now are flapping in the hot air of Washington, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
Green Mountain Coffee Roasters
The Dow Jones industrial average <.DJI> was up 33.45 points, or 0.27 percent, at 12,336.00. The Standard & Poor's 500 Index <.SPX> was up 6.75 points, or 0.52 percent, at 1,311.64. The Nasdaq Composite Index <.IXIC> was up 27.92 points, or 1.01 percent, at 2,792.71.
Exxon Mobil Corp
Trading is expected to remain volatile into the afternoon as investors await the House vote.
Volatility and volume are reflecting avoiding risk right now and waiting on clarity, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco. It's mainly just a watching-and-waiting kind of situation until the vote.
Pending sales of existing U.S. homes unexpectedly rose 2.4 percent in June from May, up sharply from a year ago.
The Dow Jones U.S. Home Construction Index <.DJUSHB> rose 1.9 percent, while the iShares Dow Jones U.S. Real Estate Trust
New weekly claims for unemployment benefits fell below 400,000 for the first time since early April.
(Editing by Kenneth Barry)