Economic data on Tuesday show that the US housing market is continuing to recover.
New home sales surged 15.6 percent in January to the highest level since July 2008. The increase in January was the biggest since April 1993.
The S&P/Case Shiller composite index of home prices in 20 cities jumped 6.8 percent in December from a year earlier, the biggest gain since July 2006.
To add to the positive newsflow, the Conference Board’s consumer confidence index jumped to 69.6 in February from 58.4 in January and the Federal Reserve Bank of Richmond’s factory index showed a return to expansion in February after a contraction in January.
US stocks rebounded on Tuesday on the positive data as well as comments by Federal Reserve Chairman Ben Bernanke that suggested to some that monetary policy is not likely to be tightened soon. Reuters reports on Bernanke's testimony to Congress:
Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank's monetary stimulus before Congress on Tuesday, easing financial market worries over a possible early retreat from bond buys... "To this point, we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation," Bernanke told the Senate Banking Committee.