NEW YORK (TheStreet) -- U.S. stocks surged on stronger-than-expected housing activity and a moderating of volatility after sharp moves in bond, commodity and currency markets roiled equities in the first two weeks of the month.
U.S. stocks added to early gains after data from the National Association of Realtors showed that existing home sales rose 2.4% in September, reaching a one-year high. Existing home sales for the month were 5.17 million, beating consensus estimates of 5.10 million, according to Bloomberg data.
The S&P 500 rose 1.96% and the Dow rose 1.31%. Nasdaq closed 2.40% higher.
Yahoo! (YHOO) reported stronger-than-forecast third quarter earnings after the market close, causing shares in the online media company to surge over 2.5%. The Marissa Mayer-run company earned 52 cents in adjusted earnings per share for the third quarter on revenue of $1.09 billion, exceeding estimates of 33-cents and $1.04 billion, respectively.Must Read: Warren Buffett's Top 10 Dividend Stocks Strong home sales figures in the U.S. outweighed weak employment figures from the European Union, leading to a second straight decline in the CBOE Volatility Index after a surge last week. Patty Edwards, managing director of investments at The Private Client Reserve of U.S. Bank, said home sales data and corporate earnings have been a positive for equity markets after a selloff in the first two weeks of October. "The U.S. stock market is not necessarily on fire, but it is certainly not waterlogged the way Europe is," Edwards said by telephone. Third quarter corporate earnings continue to point to strong consumer spending in the U.S. especially with high-end brands, and solid industrial demand. So far Apple (AAPL) , Chipotle (CMG) , General Electric (GE) , Harley-Davidson (HOG) and United Technologies (UTX) have all met or exceeded earnings forecasts. However, earnings also show a dramatically changing business outlook at Dow bellwethers like Coca-Cola (KO) and McDonald’s (MCD) , which both fell well short of earnings estimates on Tuesday. Those misses followed IBM’s (IBM) reduced outlook on Monday, which pushed shares to multi-year lows. Must Read: Warren Buffett's Top 10 Dividend Stocks Coca-Cola on Tuesday posted third-quarter earnings that missed estimates and said it would fall short of its 2014 profit targets. Shares in Coca-Cola tumbled more than 6% in Tuesday trading, closing at $40.68. McDonald's, meanwhile, reported a 30% plunge in profit as U.S.-based sales fell for a fourth consecutive quarter. Shares in McDonald's were fell less than 1% at $90.00 in Tuesday trading. Economic data may play a big part of Wednesday trading as HSBC releases its Flash China Manufacturing Purchasing Managers' Index for the month of October, and the U.S. Bureau of Labor Statistics releases September consumer price data. Chinese manufacturing PMI is expected to remain at 50.2, unchanged from September's data release, according to consensus estimates compiled by Bloomberg. Inflation in the U.S. is forecast to rise 1.6% in the month of September, down from a prior reading of 1.7% in August, according to Bloomberg data. Any surprise CPI reading may change investors perspective on the Federal Reserve's stance on monthly bond purchases and any prospective rise to the federal funds rate. Chinese manufacturing data may provide new insight into global economic growth. On Tuesday, the Chinese bureau of statistics said gross domestic product rose 7.3% between July and September, exceeding economists' estimates. Dow bellwether Boeing (BA) will report third quarter earnings before the market open, while telecom AT&T (T) will report after the close. Boeing is expected to earn $1.96 in third quarter earnings per share, according to estimates compiled by Bloomberg, while AT&T is forecast to earn 63-cents in EPS. Oil was little changed in Tuesday trading with NYMEX WTI Crude closing at $82.81, while ICE Brent closed at $86.23. The Euro closed trading at $1.271 versus the dollar. Meanwhile the benchmark 10-Year Treasury and 30-Year Treasury traded with a yield of 2.22% and 2.99%, respectively. Must Read: Warren Buffett's Top 10 Dividend Stocks -- Written by Antoine Gara in New York Follow @AntoineGara
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