U.S. stocks rose on Tuesday, boosted by a run-up in the shares of natural resource companies, as economic data reinforced recovery hopes and U.S. dollar weakness lifted global commodity prices.
The market was also boosted as fears receded about the impact of Dubai's debt woes and after a pair of business surveys showed the Chinese economy was ending the year on a strong note.
The S&P materials index <.GSPM> climbed 1.4 percent, helped by shares of commodity-oriented companies like U.S. Steel Corp
U.S. economic data showed pending sales of previously owned U.S. homes rose more than expected to their highest level in 3-1/2 years in October. The Dow Jones home construction index <.DJUSHB> gained 1.3 percent.
I'm kind of shocked on the pending home sales side. That was definitely much better than expected, especially since we didn't have much direction in October, said Dan Cook, senior market analyst at IG Markets in Chicago.
This is some of the best news I've seen in a while ... and should help drive the markets up today.
The Dow Jones industrial average <.DJI> rose 87.51 points, or 0.85 percent, to 10,432.35. The Standard & Poor's 500 Index <.SPX> gained 9.18 points, or 0.84 percent, to 1,104.81. The Nasdaq Composite Index <.IXIC> climbed 21.12 points, or 0.98 percent, to 2,165.72.
A report by the Institute for Supply Management showed the U.S. manufacturing sector expanded in November for the fourth straight month but at a slower rate than expected.
The U.S. dollar index <.DXY> was off 0.6 percent, while U.S. front-month crude shot up 1.6 percent to $78.53.
The dollar fell against a basket of six other currencies as waning worries about Dubai's debt, Australia's interest rate hike, and upbeat euro zone data dimmed the greenback's safe-haven appeal.
The benchmark S&P 500 is up 63.3 percent from its 12-year closing low on March 9.
(Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)