Reuters Pending home sales at 5-month high

(Reuters) - Pending sales of previously owned homes hit a five-month high in March as buyers rushed to sign contracts before a tax credit expired, while a jump in factory orders underscored manufacturing strength.

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Analysts said the data on Tuesday suggested the economic recovery was gaining more muscle and was setting the tone for a strong second-quarter growth pace. The economy expanded at a 3.2 percent annual rate in the January-March period.

"The second quarter is going to be stronger than the first quarter in terms of growth. The data continues to point to a sort of chewing up some of that output gap that widened out when the recession hit," said John Canally, an economist at LPL Financial in Boston.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in March, rose 5.3 percent to 102.9, building on the prior month's 8.3 percent rise. Markets had expected pending sales, which lead existing home sales by one to two months, to rise 4 percent in March.

Separately, new orders for manufactured goods received by U.S. factories unexpectedly rose 1.3 percent in March, after an upwardly revised 1.3 percent gain in February initially reported as a 0.6 percent rise, the Commerce Department said.

Economists had looked for a decline of 0.1 percent. The upbeat reports had little impact on U.S. financial markets and were overshadowed by persistent doubts over Greece's ability to tackle its debt problems. more...