New-home construction in the U.S. surged to an eight-month high in July, lifting the stock market and prospects for a broader economic recovery.
Housing starts jumped 15.7% from June to a seasonally adjusted annual rate of 1,093,000, the Commerce Department said Tuesday. Investors cheered the rise, which ended two months of declines and soared past expectations of a 965,000 rate.
Emboldened by the housing numbers, the Dow Jones industrial average rose 80.85 points to close at 16,919.59.
"This was a solid report," IHS Global Insight economists Patrick Newport and Stephanie Karol wrote in an analysis. "Builders' optimism is picking up."