U.S. stocks rose on Tuesday after encouraging earnings reports from United Parcel Service and D.R. Horton and as a rise in pending home sales helped calm fears of weakness in the housing market.
Pending sales of previously owned U.S. homes increased 1 percent, as expected, in December. That helped lift home builders' shares. D.R. Horton
The S&P 500 is up for a second straight day after falling 6.2 percent in the last three weeks of January. Some analysts say the market is correcting from that fall.
Overall, the earnings have been strong, said Eric Kuby, chief investment officer of North Star Investment Management Corp, in Chicago. Beyond the earnings, there have also been two pretty positive bits of macroeconomic data in the face of all the concern about the economic recovery stalling out.
Kuby said pending home sales as well as Monday's better-than-expected ISM report on manufacturing were reassuring investors.
The Dow Jones industrial average <.DJI> gained 76.55 points, or 0.75 percent, to 10,262.08. The Standard & Poor's 500 Index <.SPX> rose 9.44 points, or 0.87 percent, to 1,098.63. The Nasdaq Composite Index <.IXIC> added 9.20 points, or 0.42 percent, to 2,180.41.
The rally in home builders' stocks, driven by pending home sales and D.R. Horton's results, pushed the Dow Jones U.S. home construction index <.DJUSHB> up 6 percent.
Exposure to emerging markets helped industrials Cummins Inc
Cummins' stock gained 7.6 percent to $50.48 and Emerson's shares added 8 percent to $45.86, helping the S&P 500 industrial sector index <.GSPI> rise 1.5 percent. Cummins is a U.S. manufacturer of diesel engines and other power generation equipment. Emerson Electric is an industrial conglomerate whose products include climate control systems, power systems and technology used by the oil and natural gas industries.
Investors will also watch White House adviser Paul Volcker's testimony before a Senate panel. He's expected to urge lawmakers to curb risks taken by large banks, according to testimony obtained by Reuters. His comments could move bank stocks, which tumbled when reports on the proposal broke last month.
The Dow got one of its biggest boosts from JPMorgan Chase & Co
(Reporting by Edward Krudy; Editing by Jan Paschal)