Today's run might be more banked on Indian election results, one earnings report, and an analyst upgrade. The National Association of Home Builders reported a slightly more optimistic builder report as well, but today's gains were well entrenched with or without housing data.

To show just how much these Indian stocks were up, here is a full list of how much these were up around the open. Here are today's unofficial closing bell levels:

Dow 8,506.31 +237.67 (2.87%)
S&P 500 909.76 +26.88 (3.04%)
Nasdaq 1,732.36 +52.22 (3.11%)

Top Analyst Upgrades
Top Analyst Downgrades
52-Week Highs

Many investors agree that the fate of the U.S. economy, and ultimately the stock market, rests on the continued spending power of the consumer, who accounts for around 70% of overall growth.

If history is any guide, one sentiment measure suggests that growing numbers of Americans may tighten their grips on wallets and purses in the months ahead.

Yesterday, the National Association of Home Builders released its NAHB/Wells Fargo Housing Market Index. The results did not offer any reason for optimism. According to the industry trade association, the June HMI fell to 28, "the lowest level in its current cycle and ...the lowest point since February 1991."

However, a quick read of the relationship between builder sentiment and retail sales, which ultimately reflect how confident consumers are about the future, indicates that contractors might just have a good read on future spending patterns for a broad range of products and services.

Back in 1995, as the accompanying chart illustrates, the HMI fell to a low of 40 in March, and seven months later the Census Bureau's gauge of the year-on-year change in advance monthly sales for retail and food services bottomed at 3.2%. In 2001, the HMI also fell significantly, reaching a trough of 46 in October. A year later, the annual pace of retail sales hit a low of -1.6%.

While there is not enough data to establish a definitive causal relationship between the two, logic suggests there is some sort of link.

To begin with, buying a home is the single biggest purchase commitment that most individuals and families can make. Consequently, builders are likely to be the first to notice when people are nervous about spending. Eventually, those doubts show up elsewhere and overall spending suffers as a result.

There is also the housing multiplier effect. When people are confident enough to shell out big bucks to buy a home, they typically spend money on related items as well, including appliances, carpets, fixtures and fittings, and furniture. No doubt they have to be fairly upbeat to head down this path.

To be sure, there remains some doubt about the relationship between housing and the rest of the economy, though a recent Financial Times report, "Bernanke hints at thinking on housing," suggests that Federal Reserve Chairman Ben Bernanke is coming around to the view that the link is stronger than previously believed.

Whatever the case, it may be worth keeping close tabs on how homebuilders are feeling to figure out what consumers might be up to next.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

The Commerce Department reported housing starts at a annual rate of 1.957 million units last month, an increase of 5% from April. This is better than the expected 1.86 million estimate and comes after three consecutive declines: 5.5% in April, 7.5% in March, 5.9% in February.

Economists were split on the direction of May U.S. housing starts, with many believing builders hadn't fully responded to a weakening in home sales. Yet most increased their expectations for the May number.

No doubt the Federal Reserve is keeping a close eye on this one as housing starts had pointed in prior years to a strong consumer and good prospects for economic growth.

The increase in construction of new homes and apartments was helped by dry weather.  However, analysts do point out that activity in the housing market is still expected to slow down in the next few months due to rising mortgage rates, just as the building permits number indicates.

Building permits in May were worse than expected at 1.932 million units, a drop of 2.1%. Another indicator of slowdown was The National Association of Home Builders confidence index, reported yesterday, which fell to 42 in June, the lowest point in 11 years.

As I indicated in the Before the Bell posts earlier this morning, I still expect markets to be mixed for the next month at the very least.  The housing market data released this morning could create some optimism at first. But all in all, the numbers don't point to much new.  Just as the good news about the narrowing trade deficit did nothing to alleviate investors' fears of further rate hikes and a slowdown in economic growth, this up-tick in housing starts will probably have the same negligible effect.