* Homebuilders rise after data shows continued price gains
* Washington's budget squabbles expected to spark volatility
* Applied Materials shares rise on merger with Tokyo
* Facebook leads Nasdaq on report it could be allowed in
* Dow down 0.1 pct, S&P up 0.1 pct; Nasdaq up 0.4 pct
By Caroline Valetkevitch
NEW YORK, Sept 24 The S&P 500 was barely higher
on Tuesday and on track to end a three-session losing streak
after housing data pointed to a slowly improving economy, but
gains were limited by concern over budget negotiations in
Earnings results also boosted homebuilders' shares. Lennar
gained 5.5 percent to $36.43 after the No. 3 U.S.
homebuilder reported a better-than-expected quarterly profit,
while KB Home rose 5 percent to $17.89, also after
The earnings, coupled with the economic data, helped the
PHLX housing sector index climb 2.9 percent.
Though uncertainty remained over the Fed's intentions to
scale back its stimulus, the focus has shifted somewhat to
economic data. The Fed decided last week to leave its stimulus
program as is.
"Maybe people are taking a longer-term look. I think that's
healthy," said Scott Armiger, chief executive officer of
Christiana Trust in Greenville, Delaware.
In Washington, Tea Party-backed U.S. senators, threatening
to stall a bill to fund the U.S. government, ran into a wall of
resistance from top Senate Republicans, including Minority
Leader Mitch McConnell.
The refusal by Senate Republican leaders to go along did not
remove the chance of a government shutdown. Signs still pointed
to a frantic last-minute showdown that will determine whether
the U.S. government stays open next week. Republicans want to
cancel funding for "Obamacare," President Barack Obama's
The Dow Jones industrial average was down 16.17
points, or 0.10 percent, at 15,385.21. The Standard & Poor's 500
Index was up 0.76 points, or 0.05 percent, at 1,702.60.
The Nasdaq Composite Index was up 13.89 points, or 0.37
percent, at 3,779.18.
The S&P 500 index posted a third session of losses on
Monday, its longest losing streak in a month and only the fifth
time this year the index has suffered such an extended decline.
While many on Wall Street expected an eventual government
shutdown to be short and not affect markets deeply, volatility
U.S. home prices rose 0.6 percent in July on a seasonally
adjusted basis, the S&P/Case Shiller composite index of 20
metropolitan areas showed. That was a slightly slower pace than
forecast but a separate report from the U.S. Federal Housing
Finance Agency showed U.S. home prices rose 1 percent.
In other economic news, a dip in consumer confidence
reflected the potential impact that higher interest rates and a
sluggish economy could have on the housing market.
Facebook shares led the Nasdaq higher, up 4.2 percent
to $49.17 after the South China Morning Post reported the online
social media giant and other websites deemed sensitive and
blocked by the Chinese government will be accessible in a
planned free-trade zone in Shanghai. In addition, Citigroup
upgraded the stock to a "buy" rating.
Shares of Applied Materials jumped 8.6 percent to
$17.37 after the chipmaker and Tokyo Electron Ltd said
they will merge in an all-stock deal, creating a $29 billion