Blue chips lead a late day rally on Wall Street as investors snapped up beaten-down shares on the heels of the previous session's sell off.

Helping fuel the market was mildly positive news from The National Association of Realtors. The group's pending home sales index jumped an unexpected 5 per cent to 102.4 in June. However, even with the increase, the June reading is 8.6 per cent below the June 2006 level, showing that there is still weakness in the market.

Other economic news came from the Institute for Supply Management. According to its index of national factory activity, manufacturing expansion slowed in July as a decline in new orders made factory managers more cautious. The index fell to 53.8 in July, its lowest since March and down from 56 in June.