Despite discouraging news regarding the recovery in the housing market, stocks and exchange traded funds (ETFs) are trading in positive territory this morning on other encouraging news from the Commerce Department.

The Commerce Department reported that May sales of new homes dropped 0.6% to a seasonally adjusted annual rate of 342,000, down from a revised April rate of 344,000.  The results fell short of economists’ forecast of 360,000.  To add to the bad news, there were roughly 292,000 unsold new homes sitting on the market, leaving a 10-month of new homes.  Despite the news, the iShares Dow Jones U.S. Real Estate (IYR) was up about 0.3% in morning trading.

As the Federal Reserve continues its two-day monetary policy meeting, most experts predict that they won’t make any drastic changes or bold new efforts to bolster the economy.  RSome think the Fed may even slow down their already announced programs to purchase either government debt or mortgage-backed securities to snuff out any inflation. Unfortunately, slowing down the process carries the risk of rising rates of government and  mortgage debt, which could further hinder the nation’s economy from getting out of the recession.

On a positive note, durable goods orders rose for the second straight month and a gauge of business investment rose last month by the most in nearly five years.  The Commerce Department said that durable goods orders rose by 1.8% from last month, far better than the 0.6% decline forecast by economists and orders for non-defense capital goods, a measure of business investment, rose by a whopping 4.8%, indicating that business may have stopped trimming their investment spending.

More positive news indicating that the global recession may be nearing a bottom came out of the Organization for Economic Cooperation and Development (OECD) stating that it expects the economies of its members to decline by 4.1% for the year, as opposed to its previous forecast of a decline of 4.3%.  Additionally, the organization expects overall growth across its membership expected to average 0.7% in 2010, which is up from its previous forecast of 0.1% growth.

Lending has loosened up across the pond as the European Central Bank reported that it will lend banks a whopping $621 billion for 12 months, the most it has ever allotted in an auction, states Gabi Thesing of Bloomberg.  All the loans will be lent out at the current benchmark rate of 1% and will get to the banks as soon as tomorrow.  This massive lending spree should lubricate a much-battered European banking system, which accounts for nearly 75% of company financing in the region. The news helped lift the iShares S&P Global Financials (IXG) up nearly 3% in morning trading.

Overall, all three major U.S. indexes were in positive territory this morning, with the Dow Jones Industrial Average up 0.9%, the S&P 500 up about 1.4% and the Nasdaq up nearly 2.1%.

Kevin Grewal contributed to this article.

Tags: Dow Jones Industrial Average, Europe, Financial, Global ETFs, IXG, IYR, NASDAQ, Real Estate, S&P 500, Sector ETFs