WASHINGTON (Reuters) – Pending sales of existing homes surged to a 1-1/2 year high in November, an industry group said on Thursday, offering more signs of a tentative recovery in the housing market.

The National Association of Realtors’ Pending Home Sales Index, based on contracts signed in November, increased 7.3 percent to 100.1 — the highest level since April 2010.

Economists polled by Reuters had expected pending sales to rise only 2 percent. Pending sales lead existing home sales by a month or two.

Recent data on home sales and construction have been fairly upbeat, suggesting an improvement in the sector, but prices continue to trend lower.

(Reporting by Lucia Mutikani; Editing by Padraic Cassidy)

NEW YORK (Reuters) – Stocks rose on Thursday after a sharp drop in the last session but elevated Italian bond yields and a weak reading on jobless claims capped gains.

The Dow Jones industrial average (.DJI) gained 51.77 points, or 0.43 percent, to 12,203.18. The Standard & Poor’s 500 Index (.SPX) gained 4.84 points, or 0.39 percent, to 1,254.48. The Nasdaq Composite Index (.IXIC) gained 6.52 points, or 0.25 percent, to 2,596.50.

(Reporting By Edward Krudy; editing by Jeffrey Benkoe)

MILAN (Reuters) – Italian bond yields fell from recent record highs at auction on Thursday but cautious investors still demanded a near 7 percent yield to buy 10-year paper, a level seen unsustainable over time for the euro zone third-largest economy.

An injection of longer-term liquidity from the European Central Bank and a new Italian budget package this month have eased pressure on shorter-term debt, but longer-dated bonds still pose a challenge for Italy ahead of large redemptions early next year.

Italy raised around 7 billion euros on Thursday in thin holiday markets after a well-bid short-term debt auction on Wednesday. The Treasury had planned to sell between 5 billion and 8.5 billion euros of bonds.

On Thursday, Italy paid 5.62 percent to sell new three-year debt — a much lower yield compared to a euro lifetime high of 7.89 percent paid only a month ago.

The fall in the three-year yield comes after the bill sale on Wednesday saw six-month funding costs halve from a month earlier.

The 10-year yield fell to 6.98 percent from a euro lifetime record of 7.56 percent at an end-November sale.

(Reporting by Valentina Za)

(Reuters) – Standard & Poor’s placed Sears Holdings Corp’s credit rating on review for a possible downgrade on Wednesday, saying the retailer’s plan to close at least 100 stores may not do much to improve its performance.

S&P currently rates Sears’ corporate credit at “B,” which is five notches into “junk” bond territory.

Sears shares tumbled on Tuesday after the company said it would close 100 to 120 Kmart and Sears stores and reduce inventory in an effort to cut costs and get rid of underperforming locations.

But S&P, like other analysts, said the store closures may not be enough to improve profitability.

“In our view, the company’s announcement of 100 to 120 store closures may do little to help its poor performance,” the ratings agency said in a statement. “We believe that one of the primary issues is that the company has underinvested in its stores base, especially when compared with its peers.”

Sears expects to report adjusted fourth-quarter earnings of less than half of those a year earlier due to lower sales, and expects to record a non-cash charge of $1.6 billion to $1.8 billion in the period related to deferred tax assets.

Sears shares closed at $33.33 on Wednesday, down 0.2 percent for the day and 54.5 percent for the year. The stock closed at $45.85 on Friday, the last trading day before company’s store closure announcement.

(Reporting By Lauren Tara LaCapra; Editing by Bob Burgdorfer)

(Reuters) – China’s Alibaba Group has hired Washington lobbying firm Duberstein Group Inc as it eyes a possible deal with Internet giant Yahoo Inc.

Japan’s Softbank Corp is also listed as an Alibaba affiliate in the lobbying firm’s disclosure, according to the filing.

The lobbying registration lists the law firm Wachtell, Lipton, Rosen & Katz, which specializes in mergers and acquisitions, as an intermediary between Alibaba and the company’s lobbying team.

Last week, sources familiar with the matter said Yahoo was considering a plan to unload most of its prized Asian assets in a complex deal with Alibaba and Softbank valued at roughly $17 billion.

(Reporting By David Ingram in Washington and Paritosh Bansal in New York; Editing by Richard Chang)

NEW YORK (Reuters) – Stocks fell 1 percent on Wednesday after a hefty year-end rally, with the S&P 500 erasing its gains for the year as investors shifted focus to what many expect will be a difficult start to 2012.

The Dow Jones industrial average (.DJI) dropped 120.22 points, or 0.98 percent, to 12,171.13. The Standard & Poor’s 500 Index (.SPX) dropped 13.91 points, or 1.10 percent, to 1,251.52. The Nasdaq Composite Index (.IXIC) dropped 29.37 points, or 1.12 percent, to 2,595.83.

(Reporting Edward Krudy; editing by Jeffrey Benkoe)

NEW YORK (Reuters) – The S&P 500 erased its gains for the year on Wednesday as Wall Street reversed some of its recent year-end rally, with many investors expressing concern about the outlook for early 2012.

The Dow Jones industrial average (.DJI) dropped 82.65 points, or 0.67 percent, to 12,208.70. The Standard & Poor’s 500 Index (.SPX) dropped 10.40 points, or 0.82 percent, to 1,255.03. The Nasdaq Composite Index (.IXIC) dropped 24.73 points, or 0.94 percent, to 2,600.47.

(Reporting By Edward Krudy)

WASHINGTON (Reuters) – Consumer confidence rose more than expected in December, hitting an eight-month high, as Americans grew more upbeat about the labor market and their financial situation.

The Conference Board, an industry group, said its index of consumer sentiment increased to 64.5 from a downwardly revised 55.2 in November.

Economists had expected a reading of 58.3 from a previously reported 56.0 in November.

The rise in sentiment offered hope for a pick-up in consumer spending after a tepid performance in November.

Labor market conditions have improved in recent months, with the unemployment rate falling to a 2-1/2 year low in November and applications for first time jobless benefits at the lowest since April 2008.

The survey’s present situation index rose to 46.7 this month — the highest since September 2008 — from 38.3 in November. The expectations index surged to 76.4 from 66.4 in November.

“Consumers are more optimistic that business conditions, employment prospects and their financial situations will get better,” the Conference Board said in a statement.

“While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes.”

(Reporting By Lucia Mutikani; Editing by Kenneth Barry)

WASHINGTON (Reuters) – Single-family home prices fell more than expected in October, data showed Tuesday, raising doubts that recent signs of improvement in the housing market would be sustained.

The S&P/Case Shiller composite index of 20 metropolitan areas dropped 1.2 percent on an unadjusted basis, worse than economists’ expectations for a 0.5 percent fall. Prices dropped 0.6 percent in September.

For the year, home prices were down 3.4 percent in October.

Recent data have shown an improvement in home sales volumes and rising confidence among builders who have been breaking ground on new projects.

That had raised cautious optimism the housing market, one of the constraints on the economy, was on the brink of recovery.

“In light of the more positive housing numbers we’ve seen in the last week or so, this might be a bit of a disappointment,” said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington.

The data on Tuesday showed prices declined in October in 19 of the 20 cities.

(Reporting By Lucia Mutikani; Editing by Padraic Cassidy)