April recorded the biggest jump in pending home sales in nearly eight years, giving the market fresh fuel to push higher. But 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. Morgan Stanley said it will raise $2.2 billion in a stock offering, after JPMorgan Chase & Co. and American Express Co. announced similar plans late Monday. The Dow rose 19.43, or 0.2 %, to 8,740.87; at times crossing the break even line of 8,776.39 for the year before falling back. The Standard & Poor’s 500 index rose 1.87, or 0.2 %, to 944.74, and the Nasdaq composite index rose 8.12, or 0.4 %, to 1,836.80. The Russell 2000 index of smaller companies rose 5.30, or 1 %, to 526.63.

Another driving factor in today’s action was the bond market, which saw the yield on the 10 year US note fall 6 basis points to 3.62%.

Morning Outlook

Asian markets saw continued gains overnight on hopes of a Chinese recovery. For the 6th straight session, Japan saw gains with the Nikkei 225 stock average climbing 37.36 points, or 0.4 %, at 9,741.67. Hong Kong’s Hang Seng gained 187.39, or 1 %, to 18,576.47. In Europe, Britain led markets lower ahead of tomorrow’s elections. The potential unrest in the political system sent the FTSE 100 down 1.8% Germany’s DAX was 33.06 points, or 0.6 %, lower at 5,111, while France’s CAC-40 fell 34.78, or 1 %, to 3,343.26.

After a four day winning streak in the U.S., futures point to a lower open on Wall Street. Ahead of some key economic data, Dow Jones industrial average futures fell 28, or 0.3 %, to 8,686. Standard & Poor’s 500 index futures fell 4.40, or 0.5 %, to 938.20, while Nasdaq 100 index futures dipped 6, or 0.4 %, to 1,472.50.

On the Corporate Front

Luxury home builder Toll Brothers (TOL) lost $83.2 million, or 52 cents a share, in its fiscal second quarter; improving over the $93.7 million, or 59 cents a share the company lost a year earlier. Revenue for the quarter fell 51 % to $398.3 million from $818 million.

For the first half of its fiscal year, TOL generated a net loss of $172.1 million, or $1.07 per share, compared to a loss of $189.7 million, or $1.20 a share, for the year-ago period.

Economic Calendar

8:15 AM
ADP Employment Report: The new ADP national employment report can help improve the payroll forecast by providing information in advance of the employment report. By tracking the jobs data, investors can sense the degree of tightness in the labor market.

10:00 AM
Factory orders: Represent the dollar level of new orders for both durable and nondurable goods. The consensus is for an increase of 1.1% for the month of April, following a 0.9% drop in March.

10:00
ISM Non-Mfg Index: A compilation from 60 non manufacturing sectors across the economic spectrum. The index helps gauge strengths and weaknesses within the economy. The composite index for the month of May is expected to have a reading of 45; the composite index from the ISM non-manufacturing survey rose nearly 3 points in April to 43.7.

10:35 AM
EIA Petroleum Status Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. Oil prices have ticked up as OPEC continues production cuts to meet its quota, despite continued stockpiles. Trading on the NYMEX has been primarily driven by the direction of equities and the level of optimism of a sooner rather than later economic recovery.