New York, Aug 18 (IANS): US stocks reversed early losses to close higher as investors digested mixed economic reports.

The Dow Jones Industrial Average rose 67.78 points, or 0.39 percent, to 17,545.18. The S&P 500 increased 10.90 points, or 0.52 percent, to 2,102.44. The Nasdaq Composite Index jumped 43.46 points, or 0.86 percent, to 5,091.70, Xinhua reported on Monday.

The August 2015 Empire State Manufacturing Survey indicated that business activity declined for New York manufacturers.

The headline general business conditions index tumbled 19 points to minus 14.9, its lowest level since 2009 and well below the market consensus of a 4.75 percent gain, said the New York Fed.

Meanwhile, builder confidence in the market for newly-built, single-family homes in August rose 1 point to a level of 61 on the National Association of Home Builders/Wells Fargo Housing Market Index. This is the highest reading since November 2005.

In corporate news, Tesla Motors Inc. surged 4.87 percent to $254.99 a share after Morgan Stanley raised its price target on the company to $465 per share.

Overseas, Japan's gross domestic product shrank by an annualised 1.6 percent in the second quarter of 2015, contracting for the first time in three quarters, government data showed.

The Japanese benchmark 225-issue Nikkei Stock Average, however, ended 0.49 percent higher as the contraction of the second quarter 2015 was better than expected.