Wall St up - positive signs from US economy

American real estate showed further evidence of a sustained recovery, and the Fed says the US economy is expanding at a moderate pace, helping offset concern about the impact of slowing global growth on US corporate earnings.

New home sales rose 5.7 per cent to a seasonally adjusted 389,000-unit annual rate in September, according to Commerce Department data. That's the best pace since April 2010 and surpassed the 385,000 pace predicted in a Bloomberg News survey of economists.

"Housing is now a positive for the economy after years of being a drag, but it's not enough to counteract the slowdown in manufacturing, which was the star," David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, told Reuters.

In a statement today, the Fed's policy makers said US "economic activity has continued to expand at a moderate pace in recent months." However, the path forward isn't yet clear. "Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed."

The policy makers remain "concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labour market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook."

The statement, which followed a two-day policy meeting, also said that the FOMC expects that "inflation over the medium term likely would run at or below its 2 per cent objective."

In afternoon trading in New York, the Dow Jones Industrial Average was 0.11 per cent stronger, while the Standard & Poor's 500 Index was up 0.14 per cent. The Nasdaq Composite Index was steady at 2,991.28. Facebook shares jumped after signs its mobile ad strategy was starting to kick into gear.

Some market watchers predict further gains ahead, before a correction. The S&P 500 will rise 5 per cent to about 1,480 over the next two weeks before the rally ends and stocks fall, according to Tom DeMark, the creator of indicators to show turning points in securities, Bloomberg reported.

The gain would push the benchmark index above the 2012 intraday high of 1,474.51 reached on September 14 before buyers are exhausted, DeMark told Bloomberg. Then the S&P 500 is headed for a potential drop of 12 per cent to 17 per cent, he said.

In Europe, the Stoxx 600 Index ended the session with a 0.4 per cent increase from the previous close. National benchmark stock indexes in the UK, Germany and France finished the day with gains too.