Markets bounce back after sell-off
A street sign in front of the New York Stock Exchange Monday. A survey of the manufacturing and services sector across the currency union showed activity rose to a 10-month high January. (Feb. 4, 2013) Credit: Getty Images
The stock market bounced back Tuesday following a surge in U.S. home prices, signs of recovery in Europe's economy, and strong earnings reports.
The Dow Jones industrial average closed 99.22 points higher at 13,979.30, erasing a large part of its loss from Monday. The index had traded above 14,000 during the day. The Standard & Poor's 500 was up 1.04 percent to 1,511.29. The Nasdaq composite was up 1.29 percent to 3,171.58.
The rise follows two days of whiplash. On Monday the Dow dropped 129 points, its worst sell-off of the year so far, as fears about Europe's finances resurfaced. On Friday the index gained 149 points, closing above 14,000 for the first time since 2007. The Dow is now 185 points below the record high of 14,164 it reached on Oct. 9, 2007.
After strong gains for stocks this year, investors are wondering whether they should sell now or wait and see if the rally still has legs, said Brad Reynolds, chief investment officer at LJPR Inc. "The market is extremely skittish right now; that's why we're seeing such big moves," said Reynolds.
Tuesday's advance was driven by new data showing U.S. home prices rose in December at the fastest pace in more than six years. CoreLogic, a real estate data provider, reported home prices rose 8.3 percent. -- AP
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