Market bulls pull off a winner

NEW YORK (CNNMoney.com) -- Wall Street staged a late session rally to finish higher Tuesday, as higher oil and gold prices buoyed a market still grappling with credit market fears.

The Dow Jones industrials average (Charts) finished 117 points, or nearly 0.9 percent, higher, after retreating into the red earlier in the session.

The broader S&P 500 index (Charts) gained 1.2 percent, while the tech-laden Nasdaq (Charts) climbed 1.07 percent.

Stocks seesawed earlier in the session as investors worried about more bad news from the financial sector, but those fears were surprisingly offset by strength from the metals and energy sectors as oil and gold prices climbed to new heights.

Oil prices jumped more than $3 a barrel to a new record trading high of $97.07 a barrel on supply fears and a falling dollar. Light, sweet crude for December settled up $2.72 to $96.70 a barrel on the New York Mercantile Exchange.

Shares of oil majors Exxon Mobil (Charts, Fortune 500) and Chevron (Charts, Fortune 500) both climbed more than 2 percent in late trade while the Amex oil index (Charts) was 2.7 percent higher.

Gold prices continued to trade at levels not seen since 1980, as COMEX gold for December added $13 to $823.80 an ounce.

That news lifted the AMEX Gold Bugs Index (Charts) 4.3 percent higher in afternoon trade.

Investors, which have grown accustomed lately to a daily delivery of bad news from the big Wall Street banks, got a reprieve Tuesday allowing credit market fears to subside.

"Today is almost a relief rally," said Jim Herrick, head trader at the Milwaukee-based investment firm Robert W. Baird.

Just a day earlier, stocks finished lower after Citigroup (Charts, Fortune 500) warned over the weekend that it might suffer between $8 billion and $11 billion more in mortgage-related losses.

Citigroup shares extended Monday's losses, falling an additional 2.3 percent. But other financials were higher including JPMorgan Chase (Charts, Fortune 500), Goldman Sachs (Charts, Fortune 500) and Bear Stearns (Charts, Fortune 500), all of which climbed over 2 percent.

With no major economic reports on tap, investors also kept a close eye on earnings news.

Energy firm Valero (Charts, Fortune 500) said Tuesday its quarterly results fell more than 20 percent, hurt by weak refining margins, but still managed to stay ahead of Wall Street forecasts.

Agricultural giant Archer Daniels Midland (Charts, Fortune 500) reported better-than-expected earnings before the opening bell, sending its shares nearly 7 percent higher on the New York Stock Exchange.

IndyMac Bancorp (Charts) reported a $202.7 million loss Tuesday and said it may eliminate next quarter's dividend, the mortgage lender said.

Sun Microsystems (Charts, Fortune 500) returned to a profit that matched Wall Street forecasts when it reported results late Monday. But revenue fell a bit short of estimates, sending shares down 9.6 percent on the Nasdaq.

And in other corporate news, Nasdaq (Charts) was reportedly in talks to purchase the Philadelphia Stock Exchange for $500 million, CNBC reported Tuesday afternoon. Both exchanges declined to comment on the report.

Market breadth was positive. Advancers beat decliners by nearly 2 to 1 on the New York Stock Exchange on volume of 1.49 billion shares. Losers topped winners by 4 to 3 on the Nasdaq as 2.54 billion shares traded hands.

Treasury prices fell, lifting the yield on the benchmark 10-year note to 4.37 percent, down from 4.31 percent late Monday. Bond prices and yields move in opposite directions.

The dollar retreated to a new record low against the euro but gained against the yen.

With only a handful of companies reporting quarterly results Wednesday, higher oil prices could again become the focus as the Energy Information Administration issues its weekly inventory report tomorrow.