NEW YORK — Stocks pushed higher for a third straight day after a surprisingly strong report on housing provided the latest evidence that the economy is picking up speed.
All major indexes gained less than 1 percent Tuesday, with the Standard & Poor’s 500 index and the Nasdaq composite index closing at new highs for the year. The Dow Jones industrial average rose 50 points, bringing its three-day point gain to 156.
Stocks got off to a positive start after a report from the National Association of Realtors said home resales jumped 7.4 percent in November. That was much more than the 2.5 percent increase analysts expected. The government’s tax breaks have spurred sales to their highest level in nearly three years.
The report added to a recent string of encouraging news on the economy, including upbeat earnings and forecasts from technology companies and more corporate deal-making.
“It’s just another rung in the recovery ladder,” said Brett D’Arcy, chief investment officer at CBIZ Wealth Management Group.
There were other signs that investors were feeling more confident. Bond prices fell further, pushing yields sharply higher. The gap between yields on short- and long-term bonds has widened to record levels, indicating that investors see the economy growing.
Meanwhile, the dollar rose against the euro as investors bet that the U.S. will recover quicker than economies in Europe.
The Dow Jones industrial average rose 50.79, or 0.5 percent, to 10,464.93. The Standard & Poor’s 500 index rose 3.97, or 0.4 percent, to 1,118.02, while the Nasdaq composite index rose 15.01, or 0.7 percent, to 2,252.67. The S&P 500 and the Nasdaq are at their highest levels since last October.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, climbed to levels not seen since August, rising to 3.76 percent from 3.68 percent late Monday.
The yield on the three month Treasury bill rose to 0.08 percent from 0.05 percent. Short-term rates have remained low, staying in line with the Federal Reserve’s benchmark interest rate, which has been kept at a record level of near zero this year.
However, long-term yields have been on the rise, an indication to some that investors have become more sure of the economy’s strength and see an increasing potential for inflation. Inflation is bad for bonds because it eats into their fixed returns. Some analysts say the sharp rise in rates is more technical, coming after months of very low long-term bond yields.
Gold prices fell to their lowest level since early November, while oil prices reversed an early slide.
About three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume was 3.7 billion shares, compared with 4 billion shares Monday.
Business, Pages 28 on 12/23/2009