The Standard & Poor's/Case-Shiller 20-city home price index rose 5.5 percent in November compared with the same month a year ago, pushed higher by rising sales and a tighter supply of available homes.
"The turnaround in the housing market is for real," said Peter Cardillo, chief market economist at Rockwell Global Capital, who says the decline in consumer confidence will likely prove to be temporary as home prices rise. He predicts that the S&P 500 may climb as high as 1,575 this quarter as investor optimism about the economic recovery grows.
The Federal Reserve started a two-day meeting Tuesday. Investors will also be looking at the release of their statement Wednesday for clues about the outlook for the economy and interest rates.
The yield on the 10-year Treasury note rose by four basis points to 2 percent. The yield, which moves inversely to its price, is at its highest level since April.
Other stocks in the news;
— Ford fell 64 cents, or 4.6 percent, to $13.14 despite reporting earnings that beat analysts' estimates. The automaker said that its losses in Europe would be bigger than it had previously forecast. The company's stock has advanced 49 percent in the last six months.
— Seagate Technology, which makes hard disk drives for storage, fell $3.50, or 9.4 percent, to $33.91 after it reported a 13 percent drop in profits as expenses outpaced revenue growth.
— Software company VMware fell $21.18 to $77.14 after it said that it late Monday that it expects first-quarter revenue to come in lower than Wall Street analysts had forecast. The company is also cutting 900 jobs, or about 7 percent of its workforce.
— Eli Lilly rose $1.68, or 3.2 percent, to $54.32 after the drugmaker cut expenses, helping it beat analysts' expectations. The company's earnings slipped 4 percent.
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