US STOCKS-Wall St advances on optimism about housing sector

By Leah Schnurr

NEW YORK (Reuters) - The S&P 500 logged another 14-month high Tuesday as stocks rallied on a surge in existing home sales, which indicated more stabilization in housing and boosted optimism about the economic recovery.

Housing stocks led the way up with the Dow Jones U.S. home construction index up 3.9 percent following data that showed U.S. existing home sales rose in November at the fastest pace since February 2007.

Shares of D.R. Horton Inc ( DHI - news - people ) rose 3.8 percent to $11.15, while Toll Brothers Inc ( TOL - news - people ) gained 4.5 percent to $19.21.

"We definitely had a positive reaction off the housing numbers," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

Any sign of stabilization in housing lends a big boost to investor sentiment. It was the fallout from that sector's downturn that recently drove the economy into its worst recession since the 1930s and propelled the U.S. unemployment rate above 10 percent to a 26-year high.

"The housing numbers were very, very strong," Detrick added, "and that's what we've been seeing for several months."

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