Stocks rebound; Dow up 99
NEW YORK — 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. That drop came after the index gained 149 points Friday, closing above 14,000 for the first time since 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 U.S. home prices rose in December at the fastest pace in more than six years. CoreLogic, a real estate data provider, reported home prices rose 8.3 percent. In Europe, a measure of manufacturing and service businesses rose to a 10-month high January.
The yield on the 10-year Treasury note, which moves inversely to its price, climbed four basis points to 2 percent.