NEW YORK — Stocks tacked on modest gains Tuesday to extend a rally to a fourth day following a strong rise in pending home sales, the latest encouraging signal for the troubled housing market.
A slump in financial shares kept overall buying in check as several big banks said they would sell more stock to repay federal bailout money. The modest moves followed huge gains on Monday, when indicators jumped more than 2 percent on positive signs for manufacturing and other good economic signals.
“The fear is that we’re unable to tell whether we have green shoots sprouting or weeds popping up through cracks in the concrete,” said Lawrence Creatura, portfolio manager at Federated Investors in Rochester, N.Y. He was referring to early positive signs in the economy that Federal Reserve Chairman Ben Bernanke has called “green shoots.”
Investors drew some confidence from auto sales reports.
GM said its U.S. sales fell 30 percent in May from a year ago but were 11 percent better than in April. Ford said its U.S. sales fell 24 percent from a year earlier but were up 20 percent from April. Chrysler LLC’s U.S. sales fell 46.9 percent, as the company wrapped up its first month under bankruptcy protection.
Ford shares rose 28 cents, or 4.6 percent, to $6.41. GM shares no longer trade on the New York Stock Exchange and Chrysler isn’t public.