Stocks extended their gains today with a modest advance as investors weighed fresh economic data, including a sharp drop in new home sales, for clues to whether more interest rate cuts are in the offing.

The Commerce Department’s report that sales of new homes plunged 8.3% in August to the lowest level in seven years was the latest round of bad news for the housing sector, but its arrival didn’t spook investors. Instead, stocks built on the sizable gains logged yesterday.

Concerns that housing market ills could drag the broader economy into a recession have periodically bubbled up in recent months. However, with the Fed’s larger-than-expected rate cut last week, investors appeared hopeful that the central bank’s move to make capital cheaper would provide adequate stimulus to stave off a broad slowdown.

According to preliminary calculations, the Dow Jones industrial average rose 34.79, or 0.25%, to 13,912.94.

Broader indexes also advanced. The Standard & Poor’s 500 index rose 5.96, or 0.39%, to 1,531.38, and the technology-heavy Nasdaq composite index rose 10.56, or 0.39%, to 2,709.59.