Stocks advanced Tuesday, boosted by a drop in oil prices and an unexpected gain in new-home sales.
Rebounding from sharp declines last week, the market picked up momentum late in the session as oil prices drifted below $129 a barrel, easing concerns about the effect of soaring energy and food prices on consumers, whose spending accounts for about two-thirds of U.S. economic activity.
With gasoline prices up sharply from a year ago, many on Wall Street are worried that nervous consumers will stop reaching into their wallets for discretionary purchases. That concern was bolstered by fresh data from the Conference Board, which said its consumer confidence index dropped for the fifth straight month to its lowest level since October 1992.
On the housing front, investors appeared to be somewhat reassured after the Commerce Department said sales of new homes rose to a seasonally adjusted rate of 526,000 units in April, up 3% from March's level, which was the weakest pace since 1991. But another report showed home prices accelerating their slide in the first quarter.
The Dow Jones industrial average rose 68.72 points, or 0.6%, to 12,548.35. Last week, the Dow lost 3.91% -- its worst showing since February.
Broader indexes posted steeper gains Tuesday. The Standard & Poor's 500 index climbed 9.42 points, or 0.7%, to 1,385.35, and the Nasdaq composite index rose 36.57 points, or 1.5%, to 2,481.24.
The Russell 2,000 index of smaller-company stocks rose 10.29 points, or 1.4%, to 734.39.
Advancing issues led decliners by about 5 to 3 on the New York Stock Exchange.
Yields on government bonds rose Tuesday along with stocks. The yield on the benchmark 10-year Treasury note jumped to 3.92% from 3.84% late Friday.
Crude futures fell $3.34 to settle at $128.85 on the New York Mercantile Exchange. Gold fell, while the dollar gained.
Shares of home builders, which tumbled last week, rose on the increase in new-home sales, which overshadowed word that the Standard & Poor's/Case-Shiller index showed that home prices fell 14.1% in the first quarter. But such a drop had been expected -- and the April new-home sales number grabbed attention because it was the most recent gauge on the industry.
Lennar, the third-largest U.S. home builder, climbed 60 cents, or 3.6%, to $17.48. Los Angeles-based KB Home rose 16 cents to $20.68.
