Shares of several homebuilders jumped Wednesday after a report showed pending home sales surged in April to the highest level since October.
The National Association of Realtors said its seasonally adjusted index of sales agreements for previously occupied homes rose 6 percent in April from a month earlier to a reading of 110.9. March's reading was revised upward to 104.6.
The rise marked the third consecutive month of increases, all of them aided by homebuyer tax credits that expired at the end of April.
Many analysts expect sales to drop in the coming months.
Still, investors seemed pleased with the latest housing data, and homebuilding stocks posted gains along with a general stock market lift.
Hovnanian Enterprises Inc., led the homebuilder stock surge on Wednesday. The builder, which was due to report fiscal second-quarter financial results after the market closes, rose 14 cents, or 2.4 percent, to $6.11.
D.R. Horton Inc., added 34 cents, or 2.9 percent, to $12.11; Toll Brothers rose 61 cents, or 3 percent, to $20.74; PulteGroup Inc. rose 25 cents, or 2.4 percent, to $10.71; KB Home added 32 cents, or 2.3 percent, to $14.05; Lennar Corp., rose 32 cents, or 2 percent, to $16.65; and Beazer Homes USA Inc. shares were flat at $4.76.
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