NEW YORK (AP) — The Standard & Poor’s 500 index is up for the year. And for once, it was the housing market that sent stocks soaring.
The S&P 500, considered Wall Street’s most important indicator, bounded up 3.4 percent Monday and erased the last of its losses for 2009. And the Dow Jones industrials shot up more than 200 points and had their first finish above 8,400 since Jan. 13.
Two months ago, an S&P 500 in positive ground would have seemed impossible, with the stock market having fallen to 12-year lows on fears of a worsening recession. Monday’s rally was led by the same financial and housing stocks that were decimated by the credit crisis and the sinking economy, and it added more momentum to a stunning rally that began March 10.
A double dose of good housing news ignited the advance: Pending U.S. home sales rose more than forecast and had their second straight monthly gain, while construction spending rose unexpectedly in March after five straight declines.
With Monday’s gain, the S&P has soared 34.1 percent in the 39 trading days since the rally began, its steepest gain over that many days since 1933. The Dow, meanwhile, is up 28.7 percent.
Investors are betting that a stream of slowly improving data since early March mean that the economy, and Wall Street itself, have found a bottom. As they’ve kept buying, they’ve also overlooked reports, including millions of lost jobs, that point to continuing economic weakness.