US stocks extended their gains in a choppy trading session as investors shrugged off weaker than expected reading from the manufacturing sector and focused on strong housing data.
The Dow Jones Industrial Average reversed a triple digit loss earlier in the session to end 67.78 points or 0.4% higher at 17,545.18 points.
The S&P 500 Index ended 10.90 points or 0.5% higher at 2,102.20 while the Nasdaq Composite advanced by 0.9% to 5,091.70 points.
“It’s a quiet Monday and the market is fairly easy to move around right now,” Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee, told Bloomberg
“We’re in this tug of war where we’ve reached a stalemate and we’re not going to break out until we see something from the Fed.” Stocks fell immediately after the bell on data showing that manufacturing activity in the New York Region fell at the fastest pace in more than 8 years in the month of August.
The Federal Reserve Bank of New York reported earlier in the day that the Empire State Manufacturing Index plunged to minus 14.9 points in August from the previous month’s positive read8ing of 3.9 points. Any reading below zero represents a contraction.
Stocks however reversed losses on separate data showing that confidence among homebuilders rose to a decade high in the month of August.
The National Association of Home Builders’ sentiment index jumped this month to 61 from June and July’s 60 reading to give the strongest indication yet that the real estate industry was firmly on track.
Any reading above 50 indicates a positive sentiment and outlook; this was the highest reading by the index since September 2005.
“Markets should shrug off the Empire State index, as it is highly volatile. Besides, there is a big inventory problem which is a drag on manufacturing activity,” David Kelly, chief market strategist at J.P. Morgan Funds, told Market Watch.
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