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NEW YORK (CNN/Money) -
A nearly 4 percent slide in crude oil prices was the encouragement investors needed to jump back into stocks Tuesday after a tough few weeks for the market.
Nasdaq and S&P futures pointed to a mixed open Wednesday, when fair value is taken into account.
The Dow Jones industrial average (up 114.85 to 10,405.63, Charts) added 1.1 percent, and the Nasdaq composite (up 24.69 to 2,069.89, Charts) added 1.2 percent.
The Standard & Poor's 500 (up 10.88 to 1,201.57, Charts) index added 0.9 percent.
Treasury prices slipped, boosting bond yields, while the dollar gained versus other major currencies.
U.S. light crude oil for August delivery sank $2.34 to settle at $58.20 a barrel, a drop of 3.9 percent, on the New York Mercantile Exchange, after closing at a record high of $60.54 Monday.
The stock advance was broad. All but two of the 30 blue chips that comprise the Dow gained on the session, led by United Technologies (up $1.50 to $53.02, Research), General Motors (up $0.89 to $34.36, Research), Home Depot (up $0.84 to $39.31, Research) and IBM (up $1.42 to $75.30, Research).
Falling oil prices helped support stocks, as did a jump in consumer confidence to a three-year high.
"The fact that oil fell out of bed is certainly propelling the market today," said Peter Cardillo, chief market analyst at S.W. Bach, noting that the solid consumer confidence reading -- despite the record oil prices -- is a good thing. "It means they (consumers) don't think high oil prices are sustainable," he said.
Worries about spiking oil prices have weighed on the market over the last week. Sustained higher oil prices could eventually cut into economic growth, corporate profits and consumer spending.
The Conference Board's June Consumer Confidence index jumped to 105.8 from an upwardly revised 103.1 in May, topping forecasts and hitting a three-year high. Confidence is closely watched, since consumer spending fuels about two-thirds of the economy.
Meanwhile, investors are awaiting Thursday's statement from the Federal Reserve. The Fed concludes its two-day policy meeting that day, and with another quarter-point rate hike widely expected, the Fed's language will be closely watched for hints about what the central bank will do next.
A rate hike would be the ninth in a row.
"The Fed has stated pretty steadily that they are on this measured pace of tightening, and investors will be looking to see that they maintain that pace," said Maria Fiorini Ramirez, president and CEO of Maria Fiorini Ramirez Inc.
Wednesday's market will likely be influenced by the revised read on gross domestic product (GDP) growth, due at around 8:00 a.m. ET and the weekly oil inventory report, due at around 10:30 a.m. ET.
Also in focus Wednesday: business software maker Oracle (up $0.29 to $12.83, Research), which is due to report fiscal fourth-quarter earnings Wednesday.
After the close Tuesday, Symbol Technologies warned that second-quarter earnings and revenue forecasts will miss expectations due to weakness in the global retail market. The maker of bar code scanning devices also announced job cuts and said it will take a charge related to the layoffs.
Shares of Symbol (Research) fell 7 percent in extended-hour trade.
On the move
All 20 of the stocks that comprise the Dow Jones transportation average (up $46.07 to $2,071.99, Research) rose, lifting the average by 2.5 percent.
Standouts on the transports included air carriers Delta Air Lines (up $0.45 to $3.97, Research), AMR (up $1.04 to $12.25, Research) and Continental Airlines (up $0.95 to $13.64, Research).
In corporate news, a potential chip war heated up after Advanced Micro Devices (up $1.05 to $17.70, Research) filed a lawsuit against larger rival Intel (up $0.47 to $26.33, Research), saying the No. 1 computer chipmaker has an illegal monopoly in the microprocessor market.
Yet, shares of both companies gained, advancing with the rest of the chip sector.
Software maker SeeBeyond Technology (up $1.01 to $4.29, Research) jumped nearly 31 percent and was among the Nasdaq's most-active issues. Sun Microsystems (up $0.05 to $3.74, Research) agreed to buy it for $387 million.
Other Nasdaq gainers included Paychex (up $2.99 to $33.01, Research), a payroll processor, which popped 10 percent after reporting quarterly earnings that rose from a year ago and topped estimates.
Cubist Pharmaceuticals said late Monday that late-stage trials of its antibiotic Cubicin showed the drug worked in fighting heart infections, and Cubist (up $2.39 to $13.32, Research) shares climbed nearly 22 percent in active Nasdaq trade.
Wyeth (up $1.89 to $44.89, Research) gained after boosting its 2005 earnings outlook. The drugmaker attributed the strength to higher revenue growth, lower costs and a favorable tax rate.
Blue chips also got a boost from the home-building sector, which gained across the board. The Philadelphia housing sector (Charts) index rose 2.25 percent.
One notable decliner Tuesday: oil stocks, which fell in tune with the commodity. The Philadelphia oil services sector (Charts) index lost more than two percent.
Market breadth was positive. On the New York Stock Exchange, winners trounced losers by more than 11 to five as 1.37 billion shares changed hands. On the Nasdaq, advancers topped decliners by 11 to four on volume of 1.62 billion shares.
Treasury bonds slumped, raising the yield on the 10-year note to 3.97 percent from 3.90 percent late Monday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar rallied versus the euro and yen.
COMEX gold fell, losing steam along with other dollar-traded commodities. Gold dropped $4 to settle at $437.70 an ounce.
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