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Homebuilder stocks rise on strong housing data

Contractors work on the wood framing for a house under construction in the Norton Commons subdivision of Louisville, Kentucky, U.S., on Friday, July 29, 2016.
Luke Sharrett | Bloomberg | Getty Images
Contractors work on the wood framing for a house under construction in the Norton Commons subdivision of Louisville, Kentucky, U.S., on Friday, July 29, 2016.

Homebuilder stocks gained Monday as builders showed more confidence in the market for new homes in August.

The SPDR S&P Homebuilders ETF (XHB) rose more than 1 percent at its high, led by shares of Toll Brothers, CalAtlantic and Taylor Morrison, which all gained about 2 percent.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday rose 2 points to 60 following a downwardly revised reading of 58 in July. Readings above 50 indicate more builders view sales conditions positively.

Home improvement firms Home Depot and Lowe's are set to report quarterly results this week, offering another indication of the health of the housing market.

So far this year, the XHB has gained nearly 8 percent.

XHB year to dateSource: FactSet