The S&P/Case-Shiller home price index was up 12.1% in April compared to a year ago for the 20 top real estate markets across the nation. It was the biggest annual jump in prices in seven years and the 2.5% jump from March was the biggest one-month rise in the 12-year history of the index.
A report on durable goods came in better than expected. The Census Bureau said new orders for big-ticket items rose 3.6% in May. Economists had forecast a 3% rise, according to Briefing.com.
Still to come, the government's report on new-home sales for May is due at 10 a.m. ET. The Conference Board also releases its monthly reading of consumer confidence at 10 a.m.
But comments attributed to a People's Bank of China official helped ease some jitters. The official reportedly said the bank will keep interest rates in check, and that seasonal forces that have driven them higher recently will fade.
Following his comments, the Shanghai Composite, which was down as much as 5.6%, recovered to close just 0.2% lower.
"Volatility is very pronounced," Carter Worth, chief market technician at Oppenheimer, told CNNMoney in an interview. Earlier he sent around an amusing note that simply said "We have no new thoughts. Sell."
"If this kind of volatility is taking place, there is a change in the wind. That doesn't mean we are going to see a bear market or a crash, but upside is limited and downside is unknown, but very real," he told CNNMoney.
On the corporate front, shares of Walgreen(WAG) sank nearly 5% after the drugstore chain missed earnings and revenue forecasts.
Barnes & Noble(BKS) shares plunged after the bookseller said it will stop making the NOOK in-house and will partner with a third party to manufacture the eReading device. Sales in the NOOK segment fell 34% in the quarter to $108 million.
Carnival(CCL) said earnings fell 55% to 9 cents per share in the second quarter. The beleaguered cruise ship operator warned in May that earnings would suffer this year due to price cuts following the Carnival Triumph mishap. But Carnival's stock rose in pre-market trading since earnings were better than expected.
Gunmaker Smith & Wesson(SWHC) will release fourth-quarter results after the market closes.
European markets were making significant gains in morning trading after taking a big fall Monday. Germany's DAX index took the lead, rising by just over 1.5%.
Asian markets ended with mixed results after a volatile day. Like the Shanghai index, Hong Kong's Hang Seng also dropped during the day, but closed with a 0.2% gain. The Nikkei in Japan ended with a 0.7% loss.