The shares of US homebuilders kicked the week off in the black as investors cheered upbeat data on new home construction.

The S&P 500 homebuilding index rose 1.6 per cent on Monday after a closely watched report that showed homebuilder sentiment jumped this month.

PulteGroup rose 1.5 per cent to $19.87, Lennar advanced by 1.7 per cent to $45.09 and DR Horton climbed 1.6 per cent to $30.46.

The National Association of Home Builders’s gauge rose to 65 in September, from 59 the month prior. That beat Wall Street estimates of 60, and matched the October 2015 reading — the highest since 2005.

“As household incomes rise, builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move forward,” said Ed Brady, NAHB chairman.

Still, there “remains a big disconnect between what homebuilders have been saying and what they have been doing”, said Joshua Shapiro, chief US economist at MFR. Indeed, Mr Shapiro noted that the NAHB index had risen to levels last seen when construction of single-family homes were proceeding at a significantly swifter clip than it is today.

Elsewhere, energy shares also climbed as crude oil gained. West Texas Intermediate, the US oil marker, rose 0.6 per cent to $43.30 a barrel. International standard Brent was up 0.4 per cent at $45.95 a barrel.

The gains followed Venezuela saying Opec countries and other big producers were close to a deal to stabilise output, and amid tumult in Libya.

Kinder Morgan, an energy infrastructure group, rose 2 per cent to $21.90, while oilfield services company Halliburton climbed 1 per cent to $41.44.

In the biotech sector, Sarepta Therapeutics almost doubled earlier in the day after the US drugs regulator approved its treatment for duchenne muscular dystrophy, a rare and fatal childhood disorder.

Some analysts expected the Food and Drug Administration to knock the drug back after an advisory panel voted to reject the medicine amid scepticism from the agency’s scientists.

The shares were up as much as 99.6 per cent to $56.18. The stock later retreated slightly, ending the day nearly 74 per cent higher at $48.94

At the close of trade, the S&P 500 was unchanged at 2,139.1, the Dow Jones Industrial Average was little changed at 18,120.2, and the Nasdaq Composite slipped 0.2 per cent to 5,235.

The utilities, real estate and financials sectors led the way higher, while telecommunications, healthcare and information technology lagged behind.

Investors await monetary policy decisions this week from the Bank of Japan and the Federal Reserve.

The market-implied odds of a rate rise this month from the Fed have fluctuated in a wide range in recent weeks as investors have parsed mixed economic data and commentary from top officials. The probability that the central bank will increase rates for the first time since December 2015 stood at just 20 per cent on Monday, down from 32 per cent two weeks ago.

“We believe the data have met the Fed’s threshold” to raise rates, economists at Barclays said on Monday, adding however that “we view this as a close call”.

Source link