Investing.com -- U.S. stocks rose sharply on Tuesday, erasing all of their losses from the previous two sessions, as robust new homes sales last month lifted homebuilder and supplier stocks, while a surge in tech stocks helped trigger one of the strongest one-day rallies in the NASDAQ Composite index on the calendar year.
Stocks on the major indices rebounded on Tuesday morning after the U.S. Commerce Department said that new home sales in April soared 16.6% to a seasonally adjusted annual rate of 619,000, the highest monthly gain in nearly 25 years. With the sharp gains, new home sales surged to their highest level since January, 2008, topping the next closest reading by more than 70,000. Consequently, a host of homebuilders finished with strong daily performances, as Toll Brothers Inc (NYSE:TOL), PulteGroup Inc (NYSE:PHM) and DR Horton Inc (NYSE:DHI) all jumped by more than 4%.
The Dow Jones Industrial Average soared 213.12 or 1.22% to 213.12, while the S&P 500 Composite index gained 28.02 or 1.37% to 2,076.06 as both indices closed near session-highs. The NASDAQ, meanwhile, surged 95.28 or 2.00% to 4,861.06, rising to its highest level in nearly a month. On the S&P 500, all 10 sectors closed in the green, as stocks in the Technology, Financials and Health Care industries led. Investors capitalized on a short squeeze in Tuesday's session, piling into the three battered sectors. In total, seven different industries closed up by more than 1% on Tuesday.
The top performer on the Dow was Microsoft Corporation (NASDAQ:MSFT), which gained 1.59 or 3.17% to 51.62, closing as the best performing Dow component for the second consecutive day. Microsoft (NASDAQ:MSFT) shares received a pop from the launch of its new Rowe news bot. The bot is the latest addition from the company's News Pro app which debuted at the start of the year. The worst performer was BA, which inched down 0.08 or 0.06% to 127.50. It came one day after the aircraft manufacturing giant announced an $11 billion deal with VietJet Aviation, capitalizing on the lifting of the U.S. trade embargo against Vietnam.
The biggest gainer on the NASDAQ was Ctripcom International Ltd (NASDAQ:CTRP) which added 2.78 or 6.52% to 45.42. CTrip.com International finished just above Xilinx Inc (NASDAQ:XLNX), which soared 2.56 or 5.70% to 47.45. Shares in Xilinx jumped after unconfirmed reports surfaced that the California-based semiconductor maker has received a $15 billion takeover offer. The worst performer was TRIP, which fell 0.8 or 1.20% to 66.07. Trip Advisor shares fell mildly after prominent restaurateur David Moore called the travel website "a monster spiraling out of control," while telling the Daily Mail of London that reviewers should show tangible evidence that they have eaten at a restaurant "before they can slam it."
Chesapeake Energy Corporation (NYSE:CHK) added 0.38 or 10.35% to 4.05, finishing as the top performer on the S&P 500. It came as energy stocks received a boost from rising oil prices , after U.S. crude futures gained more than 1% to hit a fresh 7-month high near $49 a barrel. The worst performer was CF Industries Holdings Inc (NYSE:CF), which plunged 2.24 or 7.50% to 27.61. On Monday afternoon, the U.S. fertilizer maker terminated their proposed $8 billion merger with Netherlands company OCI Partners LP (NYSE:OCIP), citing regulatory concerns related to potential violations of U.S. tax inversion rules. Officials from CF Industries said they will pay the Dutch firm $150 million in breakup fees.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 2,347-714 margin.
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