Stocks Close Higher for Third Straight Day

NEW YORK (TheStreet) -- Stocks finished higher for the third day in a row as data showing a surge in existing-home sales offset a downward revision in third-quarter GDP.

The Dow Jones Industrial Average rose 51 points, or 0.5%, to 10,465. The S&P 500 added 4 points, or 0.4%, to 1118, while the Nasdaq improved by 15 points, or 0.7%, to 2253.

A surge of first-time buyers taking advantage of tax credits sent existing-home sales soaring 7.4% in November to a seasonally adjusted annual rate of 6.54 million units.

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The crush of buyers were racing to beat an end-of-November deadline when the tax credit was originally set to expire, though it was ultimately extended through the spring. The sales pace is the highest it's been since February 2007, according to the National Association of Realtors. The figure also topped forecasts and the 6.09 million rate posted in October.

"I think it bodes well going into the new year," said Peter Cardillo, chief market economist at Avalon Partners. "The tax credit has induced new home buyers. So it'll be interesting to see what happens when the program ends. Of course, it's somewhat inflated. But nevertheless, it's a good number."

The Federal Housing Finance Agency also said that home prices increased by a seasonally adjusted 0.6% in October, while investors pushed housing stocks higher today. The Philadelphia Housing Sector index surged 2.7%. Homebuilders KB Home(KBH) and Pulte Homes(PHM) advanced 6.8% and 4.7%.

But the better-than-expected home sales showing came amid less-assuring trends elsewhere. A final revision of third-quarter gross domestic product showed that the U.S. economy grew at a 2.2% annual rate during the period. Analysts had expected no change from the previous 2.8% estimate. Despite the downward revision, the economy still grew at its fastest clip in two years.