NEW YORK (AP) — Growing investor optimism about an economic recovery sent stocks modestly higher Tuesday.
A new report showed home prices posted their smallest annual decline in nearly three years in January. A separate report due out later in the day is expected to show consumer confidence grew in March.
The reports follow a recent trend in data that shows the economy is improving, albeit slowly. Investors have reacted positively to similar reports in recent weeks, sending stocks higher. The Dow Jones industrial average has risen in 18 of the past 22 trading sessions and is now at its highest level since September 2008.
The consumer confidence report is expected to extend the trend of modest improvement. The Conference Board's Consumer Confidence Index likely rose to 50 in March from 46 in February, according to economists polled by Thomson Reuters. The report is due out at 10 a.m. EDT.
While the expected reading would indicate growth, it is far from signaling a healthy economy. A reading above 90 means the economy is on solid footing.
A much weaker-than-expected consumer confidence report last month sent stocks tumbling — one of the few days recently on which stocks have retreated.
Investors have been growing more confident that consumers are more upbeat about the economy. Stocks continued their march higher Monday after a Commerce Department report showed consumer spending rose for the fifth straight month in February.
Consumers are a key to a sustained recovery because their spending accounts for the majority of all economic activity.
In morning trading, the Dow rose 6.04, or 0.1 percent, to 10,901.90. The Standard & Poor's 500 index rose 0.40, or less than 0.1 percent, to 1,173.72, while the Nasdaq composite index rose 5.20, or 0.2 percent, to 1,968.14.
About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 50.1 million shares, compared with 60.7 million traded at the same point Monday.
The Standard & Poor's/Case-Shiller home price index, which measures home values in 20 major metropolitan markets, fell 0.7 percent in January, compared with a year earlier. That's slightly better the 0.8 percent drop forecast by economists.
Prices rose 0.3 percent between December and January, marking the eighth consecutive monthly gain. The index is up nearly 4 percent from its bottom in May 2009, showing home prices are starting to slowly recover.
A collapse in home prices and sales along with rising mortgage defaults helped push the economy into recession in 2007. Unlike other sectors, the housing market has been less consistent in its recovery. Reports on sales, defaults and prices have shown an uneven rebound.
The market has been tolerant of the erratic housing reports, and instead has mostly focused its attention on the strength of the consumer and jobs data to dictate trading.
In corporate news, Apple Inc. and Verizon Communications both rose sharply in pre-opening trading after a report that Apple is planning to produce its popular iPhone for Verizon's wireless network.
Apple shares rose $3.82, or 1.6 percent, to $236.21. Verizon shares jumped 71 cents, or 2.3 percent, to $31.16. Qualcomm Inc., which is the predominant manufacturer of the style of chips used in Verizon phones, rose 57 cents to $42.33.
Meanwhile, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.88 percent from 3.87 percent late Monday.
The dollar was mixed against other major currencies. Gold and oil were trading in a narrow range.
The Russell 2000 index of smaller companies rose 2.17, or 0.3 percent, to 684.42.
Overseas, Britain's FTSE 100 fell 0.2 percent, Germany's DAX index rose less than 0.1 percent, and France's CAC-40 fell 0.1 percent. Japan's Nikkei stock average rose 1 percent.
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