Stocks rebound on home prices, earnings; Dow up 99
NEW YORK (AP) — The stock market bounced back Tuesday following a surge in U.S. home prices and signs of recovery in Europe's economy. Strong earnings reports also helped power the gains.
The Dow Jones industrial average ended the day 99.22 points higher at 13,979.30, erasing a large part of its loss from Monday. The index traded above 14,000 during the day before falling back in the last hour.
The Standard & Poor's 500 gained 15.59 points to 1,511.29. The Nasdaq composite was up 40.41 points to 3,171.58.
The rise follows two days of whiplash. On Monday, the Dow dropped 129 points, its worst sell-off of the year so far, as fears about Europe's finances resurfaced. On Friday, the index gained 149 points, closing above 14,000 for the first time since 2007. The Dow is now 185 points below the record high of 14,164 it reached on Oct. 9, 2007.
After strong gains for stocks this year, investors are wondering whether they should sell now, or wait and see if the rally still has legs, said Brad Reynolds, chief investment officer at LJPR, Inc.
"The market is extremely skittish right now, that's why we're seeing such big moves," said Reynolds.
Tuesday's advance was driven by new data showing that U.S. home prices rose in December at the fastest pace in more than six years. CoreLogic, a real estate data provider, reported that home prices rose 8.3 percent. In Europe, a measure of manufacturing and service businesses rose to a 10-month high January.
Estee Lauder rose $3.66, or 6 percent, to $64.71 after reporting earnings that beat analysts' expectations. Profits surged 13 percent at the beauty products company as sales in the U.S. and emerging markets rose. Computer Sciences Corp., an information technology services company, was the biggest gainer in the S&P 500. CSC rose $3.84, or 9.2 percent, to $45.75 after the company said it was raising its earnings outlook for the year because its cost-cutting efforts were yielding better results than it had expected.
Stocks have gotten off to a strong start this year. The Dow advanced 5.8 percent in January, its best start to the year since 1994, according to data compiled to S&P Dow Jones indices. The S&P 500 rose 5 percent last month.
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