NEW YORK (Reuters) - Wall Street climbed on Monday, putting the S&P 500 on track for its second straight advance as investors were encouraged by the early tone in talks to tackle the fiscal crunch and data that showed continued improvement in the housing recovery.
The S&P 500 is up more than 2 percent over the past two sessions as rhetoric from legislators has provided investors with some hope a deal could be reached to stave off the looming "fiscal cliff," a series of tax and spending changes that will start to come into effect in the new year.
Before the recent gains, the benchmark S&P index had fallen 5.3 percent since Election Day, as concerns about Washington's ability to reach an agreement became the top focus for investors.
Over the weekend, leading Democratic and Republican lawmakers expressed confidence that they could reach a deal to avert the "fiscal cliff", even as they laid down markers on raising taxes and spending cuts that may make any agreement more difficult.
But the recent climb could prove to simply be a bounce from the sharp declines, with market volatility expected to be heightened by the perception of negotiation progress.
"There has been a pretty steady downward move for a while so you are going to have days like this, especially when the news is good," said Uri Landesman, president at Platinum Partners in New York.
"In general, what you are going to watch is if there is no deal, you are going to see the market trade down during the week."
Stronger-than-expected earnings from Lowe's and Tyson Foods, as well as encouraging housing data, also contributed to the market's advance. Tyson and Lowe's were the top two percentage gainers on the S&P 500.
U.S. home resales unexpectedly increased in October, while separate data showed homebuilder sentiment rose to its highest level in over six years in November.
The PHLX Housing Index <.hgx> rose 1.7 percent.
The Dow Jones industrial average <.dji> gained 173.72 points, or 1.38 percent, to 12,762.03. The Standard & Poor's 500 Index <.spx> rose 22.52 points, or 1.66 percent, to 1,382.40. The Nasdaq Composite Index <.ixic> climbed 51.59 points, or 1.81 percent, to 2,904.72.
The S&P was holding near its 200-day moving average at around 1,382, which has acted as a resistance level since a drop below the technically significant mark on November 8.
Shares of Lowe's Cos Inc
Tyson Foods Inc
Intel shares
Commodities prices surged, boosting shares of resource companies. Freeport-McMoRan
(Reporting by Chuck Mikolajczak)
Wall Street bounces on hopes for budget talk success
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Wall Street bounces on hopes for budget talk success
