Wall Street builds momentum; Dow closes 179 up
NEW YORK — Investors restarted Wall Street’s rally Tuesday, buying financial and homebuilder stocks following a surprisingly upbeat report on home construction.
Major market indicators jumped more than 2 percent, including the Dow Jones industrial average, which rose 179 points. The technology-heavy Nasdaq surged more than 4 percent after sliding Monday.
The government’s report that housing starts rose unexpectedly to an annual rate of 583,000 in February more than offset concerns over news that Alcoa Inc. is cutting its dividend and Nokia Corp. is laying off 1,700 workers.
The construction report didn’t signal the housing market is necessarily recovering but some traders saw it as the latest ray of good news that has brightened the mood on Wall Street. Stocks began rallying a week ago after Citigroup Inc. said it operated at a profit in the first two months of the year.
Similarly upbeat assessments from other troubled banks and better-than-expected readings on retail sales have led some investors to believe the market has been too pessimistic about the economy.
Stocks surged last week in a four-session rally that left market barometers up about 10 percent — the type of gains they might normally take a year to assemble. Buyers stepped in again Tuesday after stocks posted moderate declines on Monday.
Brett D’Arcy, chief investment officer at CBIZ Wealth Management, said relatively quiet trading the past two days is “a great sign” because it means investors are holding on to gains from week and aren’t trying to grab quick profits. He said that indicates a base could be forming in the market. A week ago the Dow jumped 379 points in one session.
According to preliminary calculations, the Dow rose 178.73, or 2.5 percent, to 7,395.70.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 24.23, or 3.2 percent, to 778.12, while the Nasdaq composite index rose 58.09, or 4.1 percent, to 1,462.11.
The Russell 2000 index of smaller companies rose 17.23, or 4.5 percent, to 403.59.
Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to a light 1.49 billion shares. Light volume indicates less conviction behind the market’s moves.
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