NEW YORK (AP) – 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.
The Dow Jones industrial average rose 103.84, or one percent, to 10,405.85. The Standard & Poor’s 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.
Investors were also 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 one percent. Interest rates rose as investors moved out of the bond market and back into stocks.
It’s 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 Tuesday’s 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 can easily be exaggerated. The Dow rose almost 180 points before falling back to its closing level.
But Tuesday’s reorts 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 people’s concerns about a double-dip” recession, said Peter Bible, a partner at EisnerAmper. “We’re anemic; we’re slow; we’re crawling, but we’re 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 followed after the expiration of the tax credit.