Stocks fueled by easing oil
Strong pending home sales report also supports Dow and S&P 500; Nasdaq gets boost from Comcast deal.
NEW YORK (CNNMoney.com) -- Stocks rallied Tuesday afternoon as developments in the Iranian conflict helped to ease oil prices and a report showed encouraging signs on the troubled housing market.
The Dow Jones industrial average (up 123.94 to 12,506.24, Charts) and the broader S&P 500 (up 13.55 to 1,438.10, Charts) index both gained more than 1 percent four hours into the session. The Nasdaq (Charts) composite added 1.3 percent.
A combination of a strong February pending home sales report, a number of company deals and a slump in energy prices fired up the rally Tuesday.
"I think the slide in oil prices is the big reason for the advance today," said Ron Kiddoo, chief investment officer at Cozad Asset Management. "There's hope for a resolution to the Iranian and British conflict and that's sending oil prices lower and giving a lift to stocks."
Gains were broad based, with 29 of 30 Dow components rising. Standouts included Alcoa (up $0.73 to $34.65, Charts), Walt Disney (up $0.58 to $35.05, Charts), Home Depot (up $0.80 to $37.59, Charts) and Altria (up $1.05 to $69.27, Charts). Additionally, component United Technologies (up $0.47 to $65.19, Charts) rose after it was added to Credit Suisse First Boston's Focus list, Briefing.com reported.
The major gauges hit morning highs after the 10 a.m. ET release of the U.S. pending home sales index. The index rose 0.7 percent in February versus forecasts for a decline in the month.
Also helping stocks: falling oil prices and strength in global markets.
U.S. light crude oil for May delivery slumped $1.44 to $64.50 a barrel on the New York Mercantile Exchange on hopes for some resolution of the conflict from Iran holding 15 British naval personnel. Iran is the No. 4 oil exporter.
In global trade, Asian and European markets ended higher.
Chrysler (down $1.03 to $82.99, Charts) reported that its March auto sales declined 4.6 percent to 206,435. Ford (up $0.04 to $8.13, Charts) reported a 9 percent decline in sales to 264,975 vehicles. Both sales figures were a little stronger than the more severe drops analysts expected.
Marshall & Ilsley (up $4.28 to $50.14, Charts) rallied 11 percent in active New York Stock Exchange trade on reports that it is set to spin off its payment processing unit Metavante Corp. Additionally, private equity firm Warburg Pincus is expected to buy a stake in the spin off valued at about $4 billion.
Market breadth was positive. On the New York Stock Exchange, winners topped losers by more than 3 to 1 on volume of 885 million shares. On the Nasdaq, advancers beat decliners 2 to 1 on volume of 1.2 billion shares.
Treasury prices slipped, raising the yield on the 10-year note to 4.66 percent from 4.64 percent late Monday. Bond prices seesawed throughout the morning.
In currency trading, the dollar was little changed versus the euro and rose versus the yen.
COMEX gold for June delivery rose 30 cents to $671.80 an ounce.