Strong home sales push up stocks
A jump in new home sales and strong earnings from The Home Depot helped the Dow claw back more than half its losses from Monday. Improving consumer confidence also brought buyers back to the market.
The Dow Jones industrial average closed up 115.96 points to 13,900.13. The Dow fell 216 points on Monday, its biggest drop in three months, on concern Europe's debt crisis might flare up again. The index has moved 100 points or more four out of the past five trading days.
The Standard & Poor's 500 index rose 0.61 percent to 1,496.94. The Nasdaq composite index was up or 0.43 percent at 3,129.65.
The Home Depot jumped $3.64, to $67.56 after the home improvement chain reported that its income rose 32 percent in the latest quarter thanks to strong U.S. sales and the cleanup that followed superstorm Sandy. That made it the biggest gainer in the Dow.
"Companies on the whole, particularly U.S. companies, are doing well," Michael Mussio, a portfolio manager at FBB Capital, said.
Strong earnings from home improvement companies, as well as a jump in new home sales, compounded evidence that the U.S. housing market is maintaining its recovery, Mussio said. -- AP