Stocks rallied for a second day on Tuesday as better-than-expected earnings and encouraging data calmed investors after the market's recent sell-off.
Rising sales of previously owned U.S. homes and robust earnings from bellwethers representing consumer and industrial businesses, including Whirlpool Corp
The housing data, followed by the ISM data yesterday and the GDP last week, is making investors believe that the strength in the fourth quarter was not a fluke, and that the strength could be sustainable in the first quarter and beyond, said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville, Tennessee.
The home builders received a double jolt of good news. In addition to a 1 percent gain in December pending sales of existing U.S. homes, D.R. Horton
The Dow Jones industrial average <.DJI> rose 111.32 points, or 1.09 percent, to end at 10,296.85. The Standard & Poor's 500 Index <.SPX> gained 14.13 points, or 1.30 percent, to 1,103.32. The Nasdaq Composite Index <.IXIC> advanced 18.86 points, or 0.87 percent, to 2,190.06.
The S&P 500's gain was its biggest two-day percentage jump since October 2009, after falling 6.2 percent in the last three weeks of January.
The day's home sales data followed a string of encouraging economic news, including Monday's data on the U.S. manufacturing sector from the Institute for Supply Management, and Friday's report on the economy's fourth-quarter growth.
Shares of UPS
Exposure to emerging markets helped major industrial companies Cummins Inc
The S&P 500 industrial sector index <.GSPI> gained 1.9 percent.
In testimony before a Senate panel, White House adviser Paul Volcker urged Congress to rein in risky investing by big banks to help prevent them from becoming too big to fail.
Shares of JP Morgan Chase & Co
Credit card companies' shares rose following a positive broker comment on the sector, with American Express
Volume was light on the New York Stock Exchange, with about 1.18 billion shares changing hands, well below last year's estimated daily average of 2.18 billion. But on the Nasdaq, about 2.50 billion shares traded, above last year's daily average of 1.63 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 4 to 1, while on the Nasdaq, about five stocks rose for every four that fell.
(Reporting by Angela Moon; Editing by Jan Paschal)