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.
Energy and material stocks highlighted the advancers Tuesday, though chip stocks also jumped big after Altera ( ALTR) raised its fourth-quarter sales outlook. Altera shares rose 4.6% Tuesday, while the Philadelphia Semiconductor Index advanced 3.1%. But the broad-based equity rally did have a laggard in financial services. The KBW Bank Index held flat Tuesday, while JPMorgan Chase ( JPM) and American Express ( AXP) underperformed the rest of Dow by losing 0.6% and 1.3%. Although business conditions continued to improve in November, it was at a more sluggish pace than in October. On Tuesday morning, the Institute for Supply Management said that its
manufacturing index declined to 53.6, from 55.7, which was even lower than the dip to 54.8 that economists had been expecting. Fresh figures from the bedraggled auto industry also came to the fore this afternoon, as Toyota ( TM) said U.S. November sales increased 2.6% from a year ago. Ford ( F) sales were largely unchanged, while Chrysler's sales fell 25%. General Motors reported its own 2.2% drop in U.S. sales. After the market close, GM announced that CEO Fritz Henderson is resigning after less than a year on the job. Board chairman Ed Whitacre said at a brief press conference that he will take over the CEO spot on an interim basis. The retail sector showed strength Tuesday after strong results from Cyper Monday helped offset disappointing Black Friday sales. Earlier, the Redbook Retail Sales Index for the week ended Nov. 28, showed sales rose 3.8% year over year. The Retail HOLDRs ( RTH) ETF closed higher by $1.37, or 1.5%, at $95.10.
Shares of Staples ( SPLS) rose $1.12, or 4.8%, to $24.44 after the company reported
better-than-expected third-quarter earnings on higher North American sales. Comcast's ( CMCSA) stock rose on reports that plans to buy a majority stake in NBC Universal from General Electric ( GE) appeared to be progressing. Comcast shares were bid higher by 2.1% at $14.97, while GE's stock added 1% to $16.17. -- Written by Melinda Peer and Sung Moss in New York.