NEW YORK (CNN/Money) -
U.S. stock markets snapped back Tuesday, recovering from the previous session's steep selloff, with gains in a variety of sectors.
The Nasdaq composite (up 21.18 to 1897.82, Charts) rallied around 1.1 percent, the Dow Jones industrial average (up 61.60 to 9968.51, Charts) gained 0.6 percent and the Standard & Poor's 500 (up 7.39 to 1091.49, Charts) index gained 0.7 percent.
A mix of worries about geopolitical events, oil prices and interest rates have weighed on markets for the last few months, keeping the major indexes rangebound. Stocks declined sharply Monday, as an extension of these broad concerns and in response to news of violent attacks in the Middle East and unrest in India.
The selloff Monday made room Tuesday for investors to tiptoe back in and scoop up some bargains. However, the broader issues remained in focus.
Stocks have essentially shifted in a range since late January as investors have taken in the competing tides of stronger earnings and economic news, and the likely rise in inflation and interest rates that such advances tend to signal.
"I think we're pretty near the bottom," said Robert Long, vice president of investments at Melhado, Flynn & Associates. "We need to see a few more days of gains on strong volume, but I think we're getting near the point when people are going to focus again on the fundamentals, which remain really strong."
In particular, earnings, as was demonstrated after the close, when Dow component Hewlett-Packard (HPQ: Research, Estimates) and fellow influential technology issue Applied Materials (AMAT: Research, Estimates) both reported strong results.
Personal computer maker Hewlett-Packard earned 34 cents per share, a penny more than a year ago and in line with expectations, due to strong demand for its products. The company also boosted its full-year outlook and its shares rallied after hours.
Chip gear maker Applied Materials reported a profit of 22 cents per share in its latest profit, reversing a loss from a year ago and topping expectations, thanks to improved demand for its chips. The company also boosted its current-quarter results.
There are no market-moving earnings due Wednesday, nor are there any economic data.
What moved Tuesday?
Tuesday's gains were broad-based. Of the 30 stocks that comprised the Dow industrials, 23 rose, led by Alcoa (AA: up $1.04 to $29.74, Research, Estimates), Honeywell (HON: up $0.83 to $33.24, Research, Estimates) and Home Depot (HD: up $1.15 to $34.62, Research, Estimates).
Home Depot gained 3.4 percent after it reported a quarterly profit that rose from a year ago and surpassed estimates, due in part to store improvements and stronger sales of appliances. The company also boosted its earnings forecast for the full year.
Many companies have reported strong earnings without seeing much reaction from investors focused on other issues. The response to Home Depot may have marked a change from that trend, but more likely was in response to the overall positive tone of the session, analysts speculated.
Of the 10 most heavily-weighted Nasdaq stocks, 9 rose, including Intel (INTC: up $0.31 to $27.15, Research, Estimates) and Microsoft (MSFT: up $0.29 to $25.83, Research, Estimates), both up 1.5 percent.
Also among the gainers, Millennium Pharmaceuticals (MLNM: up $0.93 to $14.49, Research, Estimates) rose close to 7 percent after the company said data from a late-stage trial showed its drug Velcade significantly extended the lives of patients who had previously failed treatments for bone marrow cancer.
Market breadth was positive on light volume. On the New York Stock Exchange, winners beat losers by more than twelve to five as 1.34 billion shares changed hands. On the Nasdaq, advancers edged decliners by seven to six as 1.43 billion shares traded.
"You're seeing a mild rotation today into groups that have been hit hard recently and out of ones that have rallied," said Robert T. Mikkelsen, senior managing director of equity capital markets at Advest Inc. "Some of the interest-rate sensitive sectors are gaining, like REITs and airlines, and some of the gainers of the last few days, like cyclicals and oil stocks, are down today."
The market seemed to take in stride afternoon news that the White House has, unsurprisingly, renominated Alan Greenspan to chair the Federal Reserve for another four-year term.
Also released in the morning: reports on the housing market, which showed continued strength. Housing starts slipped in April from the previous month, narrowly missing economists' forecasts. Building permits rose in April, topping expectations.
Treasury prices fell. The 10-year note lost 12/32 of a point and its yield rose to 4.73 percent from 4.69 percent late Monday. Bond prices and yields move in opposite directions. The dollar was higher versus the euro and lower versus the yen.
Among commodities markets, NYMEX light sweet crude oil futures fell $1.06 to settle at $40.42 a barrel, retreating from recent highs. COMEX gold fell $3.70 to settle at $375.90 an ounce.
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