NEW YORK - Investors restarted Wall Street's rally Tuesday, buying financial and homebuilder stocks following a surprisingly upbeat report on home construction.
Stocks resume their advance
Investors held onto last week's gains. The Dow rose 2.5 percent, the S&P 500 and Nasdaq composite even more.
By STEPHEN BERNARD and
TIM PARADIS A ssociated Press
Major market indicators jumped more than 2 percent, including the Dow Jones industrial average, which added 179 points. The technology-heavy Nasdaq surged more than 4 percent after sliding Monday. Stocks have risen five out of the past six sessions.
The government's report that housing starts rose unexpectedly in February more than offset news that Alcoa Inc. is slashing its dividend.
The upbeat construction report provided the latest glimmer of hope for Wall Street and revived interest in the long-suffering housing industry. Stocks began rallying a week ago after Citigroup Inc. said it operated at a profit in the first two months of the year.
Similarly upbeat assessments from other troubled banks and better-than-expected readings on retail sales have led some investors to believe the market has been too pessimistic about the economy.
Stocks surged last week in a four-session rally that left market barometers up about 10 percent -- the type of gains they might normally take a year to assemble. Buyers stepped in again Tuesday after stocks posted moderate declines on Monday.
Brett D'Arcy, chief investment officer at CBIZ Wealth Management, said relatively quiet trading the past two days is "a great sign" because it means investors are holding onto gains from last week and aren't trying to grab quick profits. He said that indicates a base could be forming in the market. A week ago the Dow jumped 379 points in one session.
The Dow rose 178.73, or 2.5 percent, to 7,395.70.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 24.23, or 3.2 percent, to 778.12, while the Nasdaq composite index rose 58.09, or 4.1 percent, to 1,462.11.
Light, sweet crude rose $1.81 to settle at $49.16 a barrel on the New York Mercantile Exchange.
about the writers
STEPHEN BERNARD
TIM PARADIS A ssociated Press
The staples distributor issue added to a mixed quarterly report for Medtronic, which is run out of Fridley.