After showing a lack of direction in morning trading on Tuesday, stocks moved mostly higher over the course of the afternoon. The markets benefited from bargain hunting follow the sell-off that was seen in the previous session.
The major averages gave back some ground going into the close but remained in positive territory. The Dow rose 32.01 points or 0.3 percent to 12.534.67, the Nasdaq advanced 17.90 points or 0.6 percent to 2,854.06 and the S&P 500 climbed 6.27 points or 0.5 percent at 1,319.99.
The strength that emerged on Wall Street was partly due to bargain hunting, with some traders picking up stocks at reduced levels following Monday's steep losses.
Buying interest was also generated by another relatively upbeat housing report, as Standard & Poor's released a report showing a bigger than expected increase in home prices in major metropolitan areas.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.7 percent in April, matching the upwardly revised increase in March. Economists had expected home prices to increase by 0.4 percent.
The upbeat home price report came on the heels of the release of Monday's Commerce Department report showing stronger than expected new home sales growth in May.
However, lingering concerns about Europe helped to limit the upside for the markets along with a report from the Conference Board showing a continued deterioration in consumer confidence in the month of June.
The Conference Board said its consumer confidence index dropped to 62.0 in June from a downwardly revised 64.4 in May. Economists had expected the index to slip to 63.5 from the 64.9 originally reported for the previous month.
Rob Carnell, chief international economist at ING, noted that there is "some evidence that the looming fiscal cliff is beginning to weigh on household sentiment."
In corporate news, shares of News Corp. (NWS) rose by 8.3 percent after the media giant confirmed that it is considering splitting its publishing and entertainment businesses into two companies.
Apollo Group (APOL) also turned in a strong performance after the education company reported better than expected third quarter earnings. The company also forecast full year revenues in line with analyst estimates.
Sector News
Housing stocks saw significant strength on the day, benefiting from S&P's report on home prices. The strength in the housing sector is reflected by the 2.6 percent gain posted by the Philadelphia Housing Sector Index.
M/I Homes (MHO) helped to lead the sector higher, surging up by 9.3 percent, while Meritage Homes (MTH), Toll Brothers (TOL), and PulteGroup (PHM) also posted notable gains.
Considerable strength also emerged among steel stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Steel Index. Steel Dynamics (STLD) and Commercial Metals (CMC) turned in two of the sector's best performances.
Oil, natural gas, and retail stocks also showed strong moves to the upside on the day, while gold stocks came under pressure amid a decrease by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index fell by 0.8 percent, Hong Kong's Hang Seng Index ended the day up by 0.5 percent.
The major European markets also turned mixed over the course of the trading day. The German DAX Index inched up by 0.1 percent, while the U.K.'s FTSE 100 Index edged down by 0.1 percent and the French CAC 40 Index dipped by 0.3 percent.
In the bond market, treasuries climbed well off their early lows but still ended the day in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by 2 basis points to 1.628 percent after reaching a high of 1.652 percent.
Looking Ahead
Economic data may attract some attention on Wednesday, with traders likely to keep an eye on reports on durable goods orders and pending home sales.
On the earnings front, General Mills (GIS), Lennar (LEN), and Monsanto (MON) are among the companies due to release their quarterly results before the start of trading on Wednesday.
For comments and feedback: editorial@rttnews.com