The Motley Fool Previous Page

Dow Jumps on New Housing Sales

Jeremy Bowman
February 26, 2013

A day after Italian elections sent stocks tumbling, the Dow Jones Industrial Average (INDEX: ^DJI) battled back to finish with a gain of 116 points, or 0.8%, on some strong economic reports and Federal Reserve Chairman Ben Bernanke's defense of its bond-buying program.

January new-home sales jumped 16% to 437,000, well ahead of expectations of 383,000, as they reached their highest level since July 2008. The surprising increase helped reassure investors of the continuing housing recovery after a weak housing starts report last week, and sent homebuilder stocks soaring as Hovnavian jumped 11% and KB Home gained 7%. Dow component Home Depot (NYSE: HD) was also up 5.7%, propelled by the new-home sales report and its own strong earnings report (more on that later).

The conference board's Consumer Confidence rating also jumped from 58.4 in January to 69.0 in February,