NEW YORK (TheStreet) -- The major indices clawed back nearly all of their losses from the past week on Tuesday, as better-than-expected pending home sales and construction spending helped investors shrug off recovery doubts triggered by Dubai's debt troubles.
The Dow Jones Industrial Average finished higher by 127 points, or 1.2%, to 10,472. The S&P 500 rose 13 points, or 1.2%, at 1109. The Nasdaq rose 31 points, or 1.5%, to 2176.
Doug Roberts, chief investment strategist at ChannelCapitalResearch.com, noted that Tuesday's advances demonstrate that investors clearly bounced back from the recent angst-ridden days of Dubai debt uncertainty. And with a slate of promising to lukewarm data to churn through Tuesday, "investors chose to look at the positive headlines as opposed to the negative" in pushing up stocks.
In one such headline, October pending home sales were much better than expected, rising 3.7%, according to the National Association of Realtors. The news came as a welcome surprise because economists had anticipated sales dropping into negative territory.Construction spending was flat in October after falling for five consecutive months, according to the U.S. Commerce Department. Economists had expected spending to dip 0.5% during the month. Shares of homebuilders strengthened on the news with D.R. Horton (DHI) trading 1.4% higher and Lennar (LEN) up by 1.7%. Home improvement retailer Home Depot (HD) and construction equipment manufacturer Caterpillar (CAT) were two of the bigger winners on the Dow, adding 3.3% and 2.2%. Commodity prices also surged in the afternoon, sending related equities higher, as a flight to higher yields sent the Dollar Index down 0.5% recently. Prices on the most actively traded February gold contract touched new highs for the year, settling at $1,200.20 an ounce after gaining $17.90. Crude oil for January delivery advanced for a second straight day, settling at $78.37 a barrel after adding $1.09.
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