NEW YORK Investors regained some enthusiasm for stocks Tuesday, sending prices sharply higher after reports showed a slight improvement in the housing market and a big jump in industrial production.
Investors also were encouraged by earnings from Home Depot Inc. and Wal-Mart Stores Inc. that were better than expected. The Dow Jones industrial average rose 103 points. All the major stock indexes were up more than 1 percent. Interest rates rose as investors moved out of the bond market and back into stocks.
Its too early to say whether stocks have recovered from a recent slump that sent the Dow falling almost 400 points over four days or whether Tuesdays advance was an upward blip. Many traders are on vacation or avoiding any stock moves because of the uncertainty of the economy. That means low trading volume and price moves that easily can be exaggerated. The Dow rose almost 180 points before falling back to its closing level.
But Tuesdays reports provided a slice of optimism and some reassurance that the economy continues to expand, although at a slower pace than early this year.
The data and earnings should ease peoples concerns about a double-dip recession, said Peter Bible, a partner at EisnerAmper. Were anemic; were slow; were crawling, but were not going backward.
The Commerce Department said construction of new homes and apartments rose 1.7 percent in July, but applications for building permits fell by a higher than expected 3.1 percent. Building permit applications are considered a good gauge of future activity.
Home sales have struggled to regain momentum after a home-buyer tax credit expired at the end of April. So signs of stabilization in the market are considered somewhat positive after the sharp declines that came after the expiration of the tax credit.
And industrial production jumped 1 percent in July, double the 0.5 percent growth forecast by economists. Rising output at the nations factories, mines and utilities comes after multiple manufacturing reports had shown a pronounced slowdown over the last couple of months.
That is fairly robust, Jeff Bagley, vice president and portfolio manager at Haverford Investments, said about the industrial production report. Its another point of relief for investors.
The Dow Jones industrial average rose 103.84, or 1 percent, to 10,405.85. The Standard & Poors 500 index rose 13.16, or 1.2 percent, to 1,092.54, while the Nasdaq composite index rose 27.57, or 1.3 percent, to 2,209.44.
About four stocks rose for one that fell on the New York Stock Exchange where volume came to a light 4.05 billion shares, up from 3.15 billion Monday.