The Dow Jones Industrial Average (DJINDICES:^DJI) was up 25 points as of 11:30 a.m. EDT. Intel (NASDAQ:INTC) was one of the Dow' Jones' best performers, while tech stocks Micron Technology (NASDAQ:MU) and Groupon (NASDAQ:GRPN) also experienced notable rallies.
New home sales come in better than expected
The Census Bureau said new U.S. homes were sold at a seasonally adjusted annual rate of 504,000 homes last month, more than the 440,000 that economists had expected. On a month-over-month basis, the rate grew by 18.6%, far more than the 1.6% estimate. Keep in mind that home sales numbers have a huge margin of error, so you don't want to look too deeply into any one data point.
However, this is the second-consecutive positive housing report of the week. On Monday, data on existing home sales came in better than anticipated. Combined, the reports suggest the U.S. housing market may be doing better than many believe. A strong housing market indicates an improving labor market, as U.S. workers may be better able to afford homes. That, in turn, may bode well for U.S. stocks.
Intel rises on PC hopes
Intel gained more than 1.5% in early trading. The semiconductor giant may have benefited from positive comments on the state of the traditional PC market. Early on Tuesday, Ingram Micro CEO Alain Monie told CNBC that businesses were swapping their old PCs for newer models.
Although Intel has made a concentrated effort at breaking into the mobile chip market, the company remains largely dependent on traditional personal computers. Although Ingram Micro's CEO acknowledged that mobile devices were a long-term threat, he argued that PCs weren't going away, at least in the near future.
Groupon jumps after positive comments
Groupon was one of the best-performing tech stocks on Tuesday, gaining more than 8%. The daily deals giant is in fact something quite different, according to Piper Jaffray -- and that may be benefiting Groupon shareholders.
Groupon has sought to transition its business model from one based on timed, inbox-dependent daily deals to one centered around a marketplace for local discounts. That transition is working, Piper Jaffray argued, and makes it more confident in the firm's outperform rating.
Micron gets an upgrade
Micron Tech shares, up nearly 5% by late morning, were similarly benefiting from an upgrade from Needham.
Needham had been positive on Micron, but is now even more so, raising its rating on the chip company from buy to strong buy. Needham believes Micron Tech shares are worth $50, suggesting an upside of more than 50% from current levels.
In particular, Needham is optimistic about Micron's NAND business, arguing that the segment's gross margins are materially improving. Additionally, Needham believes that Micron will eventually benefit from its proprietary solid state solutions as they ramp up over time.