Wall Street's terrific Tuesday

Major stock gauges jump as investors welcome falling oil prices and rise in housing market report.

By Rob Kelley and Alexandra Twin, CNNMoney.com staff writers

NEW YORK (CNNMoney.com) -- Stocks surged Tuesday in a broad-based rally as investors welcomed falling oil prices and encouraging signs from the troubled housing market.

The Dow Jones industrial average (up 128.00 to 12,510.30, Charts) added 1 percent and the broader S&P 500 (up 13.22 to 1,437.77, Charts) index added 0.9 percent. The Nasdaq (Charts) composite added 1.2 percent.

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Stocks began the day on a positive note thanks to the slide in oil prices and expanded gains following the morning release of the housing market report.

U.S. light crude oil for May delivery slumped 2 percent on the New York Mercantile Exchange after Britain and Iran said diplomacy could end the conflict over 15 British naval personnel held in the Gulf.

Meanwhile, the February pending home sales index showed a surprise rise, versus economists' expectations for a decline.

"Energy prices are back down on expectations that the 15 soldiers will be back in the U.K. soon and pending home sales came out better than expected," said Art Hogan, chief market analyst at Jefferies & Co.

Hogan said that one of investors' biggest concerns is that the real estate market could drive the economy into recession. In light of that, the strong housing market report was a comfort.

"We're very much a momentum-driven market today," he added. "The markets are reacting to news stories and geopolitical events, and we will continue to until we start getting some first quarter earnings news from corporate America in two weeks."

Trade the rest of this week should be pretty quiet amid the ongoing Passover holiday and ahead of Good Friday, said Ron Kiddoo, chief investment officer at Cozad Asset Management.

On Friday, stock markets are closed, while bond and commodity markets will see limited trading. However, Friday also brings the March employment report, the biggest economic news of the month.

Ahead of that is the ADP National Employment report for March, which measures payroll growth in the private sector.

"If the ADP report comes out and really shakes things up, you'll see a big stock reaction, but otherwise it will be pretty quiet," said Kiddoo.

Wednesday also brings reports on factory orders and the services sector of the economy.

Stock gains were broad, with 29 out of 30 Dow components rising.

Standouts included Alcoa (up $0.70 to $34.62, Charts), Home Depot (up $0.84 to $37.63, Charts) and Altria (up $1.43 to $69.65, Charts).

The decline in energy prices Tuesday was a boon to companies that depend directly on fuel, such as airlines, truckers and railroads.

The Amex Airline (Charts) index added 3.4 percent and the Dow Jones Transportation (up 84.95 to 4,901.78, Charts) average added 1.8 percent.

The traditional Big Three automakers reported March sales throughout the day.

General Motors (up $0.64 to $31.47, Charts) said U.S. sales slipped 4 percent, missing forecasts for a narrower decline. DaimlerChrysler (down $1.07 to $82.95, Charts) said U.S. sales declined 4.6 percent, while Ford (down $0.01 to $8.08, Charts) reported a 9 percent decline. Analysts were expecting both companies to report steeper declines.

In other news, Comcast (up $0.50 to $26.24, Charts) said it's buying privately held cable company Patriot Media & Communications for about $483 million in cash.

Dean Foods (up $1.37 to $33.70, Charts) said it's returning $1.94 billion to shareholders through a special $15 dividend.

Marshall & Ilsley (up $3.97 to $49.83, Charts) rallied 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 around 3 to 1 on volume of 1.56 billion shares. On the Nasdaq, advancers beat decliners 2 to 1 on volume of 1.99 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 rose versus the euro and the yen.

COMEX gold for June delivery fell $1.80 to settle at $669.70 an ounce.


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.