Wall Street mixed as US home prices rise

Wall Street was mixed overnight as investors weighed reports underpinning the recovery in the US housing market, with signs rising mortgage rates might curb home buyers' appetites and consumer confidence remains weak.

In late afternoon trading in New York, the Dow Jones Industrial Average slipped 0.11 per cent. The Standard & Poor's 500 Index rose 0.16 per cent, and the Nasdaq Composite Index gained 0.47 per cent.

Shares of JPMorgan Chase fell, last down 1.4 per cent, for the biggest percentage decline in the Dow, while those of Boeing gained, last up 1.6 per cent, for the largest percentage increase.

Shares of Lennar rallied, last up 4.9 per cent, after the homebuilder posted a quarterly profit that exceeded expectations.

"We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multifamily homes built over the last five years." Lennar Chief Executive Officer Stuart Miller said in a statement. "While there may be bumps along the road that may impact the short-term pace of the recovery, the long-term outlook for our business remains extremely bright."

Meanwhile the latest data on the housing market showed US home prices climbed 0.6 per cent in July on a seasonally adjusted basis, according to the S&P/Case Shiller composite index of 20 metropolitan areas, while US Federal Housing Finance Agency data showed home prices increased 1 per cent.

The pace of recovery is clear, but rising bond yields, pushing mortgage rates higher, might weaken the home buyers' appetite.

"Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined. More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked," David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.

"Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing," Blitzer said. "The Fed's announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favourable, impact on housing."

And home prices are still a long way from their peak levels.

"Home prices still have a long way to go before home prices are back to levels that predated the collapse of the housing market," Thomas Simons, a money market economist at Jefferies, wrote in a note to clients, Reuters reported.

Consumer confidence remains shaky. The Conference Board's consumer confidence index fell to 79.7 this month, the lowest level since May, from 81.8 in August.

In Europe, the Stoxx 600 Index ended the day with a 0.2 per cent increase from the previous close, as did the UK's FTSE 100. Germany's DAX advanced 0.3 per cent, and France's CAC 40 added 0.6 per cent.

In Germany, Europe's largest economy, business confidence rose in September to the highest level in more than a year, Ifo institute data showed, though it missed expectations.