Wall Street up on banks, housing data

NEW YORK (Reuters) - Stocks rose on Tuesday, led by financial and housing shares, after home resales rose in April to their highest annual rate in nearly two years in another sign that the housing market may be on the road to recovery.

But gains were capped as Facebook shares lost about 20 percent of the online social network's IPO price in just two days following its market debut, and as a downgrade on Japan from Fitch heightened concerns about the global economic growth.

The S&P 500 financial sector index <.GSPF> was up 1.6 percent. Bank of America Corp rose 3.4 percent to $7.06 and JPMorgan gained 4.2 percent to $33.87. American Express Co rose 1.2 percent to $57.00.

Home resales rose strongly in April and a falloff in foreclosures pushed prices higher, hopeful signs about the pace of recovery in the still-struggling housing sector.

"The market is looking for some good news and housing looks as though it's bottoming out here... After some weak news on the industrial side last week the housing is balancing that out a bit," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

Shares of Facebook Inc fell again at the open as doubts about the company's valuation increased after Reuters reported that underwriters cut their revenue forecasts for the social networking site shortly before the IPO.

Facebook's shares hit a low of $30.98 earlier on Tuesday, a steep decline from its Friday IPO price of $38 a share.

The Dow Jones industrial average <.DJI> was up 56.53 points, or 0.45 percent, at 12,561.01. The Standard & Poor's 500 Index <.SPX> was up 10.52 points, or 0.80 percent, at 1,326.51. The Nasdaq Composite Index <.IXIC> was up 15.76 points, or 0.55 percent, at 2,862.97.

(Editing by Dave Zimmerman)

WhatsAppFacebookTwitterLinkedinBeloudBluesky