US stocks higher on positive economic news

On the move: three sets of economic figures gave investors a boost

US shares headed higher on Tuesday after a flurry of economic data pointed to a rebound in the economy - and took dealers' minds off the Dubai story.

Better reports on construction and housing suggested there was something to look forward to.

The housing figures, from the National Association of Realtors, provided the best hopes for growth, showing sales agreements 3.7% up on the month.

That left the number of agreements 32% higher than a year ago.

Growth indicator

The Dow Jones index closed up 126.66 points, or 1.2%, on Tuesday to reach 10,471.50 points..

The government said construction spending rose by 0.4% in October from the previous month - the first increase in six months.

However there were worse-than-expected figures from the Institute for Supply Management, a trade group of purchasing executives.

Its manufacturing sector index dropped from a measure of 55.7 in October to 53.6. But investors took heart from the fact it still read above 50 - something that indicates growth.

Weak dollar

Investors wrapped the data together into a positive indicator of future economic prospects.

A weaker dollar played its part, too. It dropped 0.6% against the euro and fell more than 1% against the pound. A fall is seen as helpful to the US economy as it makes US exports cheaper. Against the euro the dollar was 0.662 and 0.602 against the pound.

The share rises and currency moves came after an uncertain time for the markets after the news that Dubai World needed to hold off on its debt repayments.

The effects of that statement, made last Wednesday, was still being felt but mainly within the share markets of Dubai and its fellow emirates.