By Anora Mahmudova and Wallace Witkowski, MarketWatch

Pending home sales surge in April

U.S. stocks paused Thursday after two days of strong gains as crude prices retreated from the $50 a barrel level and investors brushed off better-than-expected economic reports.

Orders for durable goods (http://www.marketwatch.com/story/us-durable-goods-orders-jump-34-in-april-2016-05-26) manufactured in the U.S. jumped in April, fueled by higher demand for new cars, trucks and commercial jets. But a key measure of business investment fell again. Meanwhile, jobless claims (http://www.marketwatch.com/story/jobless-claims-drop-10000-to-268000-2016-05-26) fell to a one-month low last week, suggesting the labor market remained robust.

A gauge of pending home sales jumped (http://www.marketwatch.com/story/pending-home-sales-surge-51-to-a-10-year-high-in-april-2016-05-26)in April, rising to the highest since February 2006. Sales of new and existing homes also surged in April, (http://www.marketwatch.com/story/housings-lost-decade-may-be-coming-to-an-end-2016-05-24) a sign that builders are stepping up construction as demand for housing remains robust.

The Dow Jones Industrial Average was off by 30 points, or 0.2%, to 17,821, following a 359-point rally over the previous two sessions. The S&P 500 pulled back 1 point to 2,089, weighed down by the financials and materials sectors.

The Nasdaq Composite , which fluctuated between slight gains and losses, was last up 1 point at 4,896.

"While we saw a nice rally over the past few days, and it appeared the market is signalling that it can handle rate hikes, I would question whether this rally is sustainable, because earnings growth is still negative," said Karyn Cavanaugh, market strategist at Voya Investment Management.

Brent crude briefly rose above $50 a barrel on Thursday (http://www.marketwatch.com/story/brent-crude-tops-50-a-barrel-for-first-time-since-november-2016-05-25) for the first time in six months, and West Texas Intermediate crude also has briefly traded above the $50 mark.

WTI futures slipped 7 cents to $49.49 a barrel.

The Dow average turned 120 years old on Thursday. Read how to use that market to your advantage (http://www.marketwatch.com/story/how-to-use-the-dow-industrials-to-your-best-advantage-2016-05-26).

Individual movers:Dollar Tree Inc.(DLTR) shares jumped 13% after the discount retailer boosted its outlook (http://www.marketwatch.com/story/dollar-tree-raises-outlook-as-sales-double-2016-05-26), while Dollar General Corp.(DG) shares rose 4.8% even as adjusted quarterly profit missed forecasts, with revenue topping expectations (http://www.marketwatch.com/story/dollar-general-profit-beats-but-sales-fall-short-in-first-quarter-2016-05-26).

HP Inc.(HPQ) shares rose 5.6% after the PC and printer maker reported quarterly results (http://www.marketwatch.com/story/hp-inc-revenue-declines-full-year-guidance-cut-2016-05-25-164851221) late Wednesday.

PVH Corp.(PVH) shares rose 5.3% after the Calvin Klein parent company raised its guidance (http://www.marketwatch.com/story/pvh-raises-earning-guidance-on-strong-sales-2016-05-25-174852516) for the year.

Signet Jewelers Ltd.(SIG) posted adjusted quarterly profit that beat, but revenue missed. Shares fell 7.8%.

Abercrombie & Fitch Co.(ANF) shares sank 18% as the retailer's same-store sales fell 4% and its quarterly loss was bigger than expected (http://www.marketwatch.com/story/abercrombies-sales-slip-as-shopper-traffic-stalls-2016-05-26).

Costco Wholesale Corp.(COST) revealed late Wednesday that its sales stagnated in its third quarter (http://www.marketwatch.com/story/costco-sales-stall-in-third-quarter-2016-05-25), but shares were up 3.8%.

Other markets:European stocks (http://www.marketwatch.com/story/european-shares-waver-as-spanish-banks-slide-oil-stocks-rise-2016-05-26) have been trading slightly higher, and most Asian markets closed with modest gains (http://www.marketwatch.com/story/oils-rise-buoys-asian-energy-shares-2016-05-26). Gold futures advanced, and a key dollar index inched lower.

Economic news: Japanese Prime Minister Shinzo Abe on Thursday reportedly warned (http://www.marketwatch.com/story/are-commodities-signaling-a-lehman-sized-meltdown-japans-abe-thinks-so-2016-05-26) that the commodities selloff in the last two years could indicate another global financial crisis is coming.

Pending home sales for April jumped 5.1% to their highest level since February 2006 (http://www.marketwatch.com/story/pending-home-sales-surge-51-to-a-10-year-high-in-april-2016-05-26), soundly topping an expected 0.8% increase.

On the Federal Reserve front, Fed Gov. Jerome Powell said at the Peterson Institute for International Economics in Washington, D.C. that a hike in interest rates hike may come soon but weak productivity will curb further hikes (http://www.marketwatch.com/story/feds-powell-interest-rate-hike-may-come-soon-but-weak-productivity-will-cap-increases-2016-05-26).

Speaking in Singapore, St. Louis Fed President James Bullard noted the U.S. job market is relatively tight and could put upward pressure on inflation, according to a Reuters report (http://www.reuters.com/article/us-usa-fed-bullard-idUSKCN0YH10B).

--Victor Reklaitis in London contributed to this report.

(END) Dow Jones Newswires

May 26, 2016 12:52 ET (16:52 GMT)

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