Stock buying picked up momentum Tuesday as rising commodity prices and reports on manufacturing and housing pointed to a rebound in the economy.
Stock buying picked up momentum Tuesday as rising commodity prices and reports on manufacturing and housing pointed to a rebound in the economy.
Major stock indicators rose more than 1 percent, including the Dow Jones industrial average, which added 125 points.
The weakening dollar again boosted stocks, a pattern that has been familiar in recent months. A cheaper U.S. currency helps strengthen foreign demand for commodities, which in turn bolsters the value of energy and materials stocks.
Economic reports were mixed, but still pointed to a strengthening trend in the economy.
The Institute for Supply Management, a trade group, said its index of manufacturing activity fell to 53.6 in November from 55.7 in October. The figure was short of the 55 analysts polled by Thomson Reuters had expected, but still signaled growth.
Some of the measures within the report improved. New orders, an indicator of future production, rose and the index's employment measure grew for the second straight month after sliding for more than a year.
Separately, the National Association of Realtors said its seasonally adjusted index of sales agreements rose 3.7 percent in October from September. It was the strongest level since March 2006 and a gain of nearly 32 percent from a year earlier. Economists had expected the index would fall.
The government said construction spending rose 0.04 percent in October, the first increase in six months.
The reports gave investors new confidence that a nearly nine-month rally in the stock market still has legs thanks to continued signs of expansion in the economy.
Richard Ross, global technical strategist at Auerbach Grayson in New York, said the drop in the dollar and jump in riskier assets like commodities signals investors aren't willing to give up on the market's surge even if they have concerns it might be overdone.
"It speaks to that sort of bullish undercurrent," he said. "Whether it's misplaced optimism, that's another question."
In midday trading, the Dow rose 124.39, or 1.2 percent, to 10,469.23. The Standard & Poor's 500 index gained 12.90, or 1.2 percent, to 1,108.53, while the Nasdaq composite index rose 30.85, or 1.4 percent, to 2,175.45.
The ICE Futures U.S. dollar index, which measures the greenback against a basket of foreign currencies, fell 0.7 percent.
Crude oil rose $1.38 to $78.66 per barrel on the New York Mercantile Exchange. Gold rose.
News of a deal between General Electric Co. and Vivendi that opens the way for control of NBC Universal to be sold to cable operator Comcast Corp. also gave a lift to the markets.
General Electric's agreement to buy out the rest of NBC Universal will make it possible for GE to sell control of the TV and movie company to Comcast. A person with knowledge of the talks told The Associated Press late Monday GE will pay slightly less than the $6 billion that French media conglomerate Vivendi SA hoped to command for its 20 percent stake in NBC Universal. The person spoke on condition of anonymity because the negotiations were private and the companies' agreement has not yet been formalized.
Comcast rose 18 cents, or 1.2 percent, to $14.84, while GE rose 5 cents to $16.07.
The Russell 2000 index of smaller companies rose 8.31, or 1.4 percent, to 588.04.
Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 429.4 million shares compared with 381.8 million shares traded at the same point Monday.
Overseas markets rose as fears eased about Dubai's credit problems. The emirate's government investment company said it was looking at restructuring part of its $60 billion in debt.
Japan's Nikkei stock average added 2.4 percent. In afternoon trading, Britain's FTSE 100 rose 2 percent, Germany's DAX index advanced 2.1 percent, and France's CAC-40 rose 2.2 percent.
