Surprise jump in housing starts ignites rally

NEW YORK, (Reuters) – U.S. stocks surged on  Tuesday as an unexpected leap in housing starts pushed Home  Depot and other retailers higher while bullish comments from a  broker on Cisco Systems helped technology shares rebound.

A nearly 4 percent rise in U.S. crude oil futures boosted  energy shares. Chevron shares rose 3.8 percent to $65.31 and  ranked as the Dow’s top gainer.

Retailer Home Depot’s stock was another top Dow advancer,  rising 6.7 percent to $21.48, after data showed housing starts  rose 22.2 percent in February and a brokerage raised its view  on several retailers, citing an improved outlook for the  economy.

The Nasdaq reversed a 1.9 percent slide on Monday after  Goldman said investors should buy Cisco Systems on the view a  new server will increase the company’s profits. The stock rose  4.5 percent to $16.14.

“Investors are starting to get a sense that things are  stabilizing. They’re not getting any worse,” said Terry  Morris, a portfolio manager with National Penn Investors Trust  Company in Reading, Pennsylvania.

The Dow Jones industrial average gained 178.73 points, or  2.48 percent, to 7,395.70. The Standard & Poor’s 500 Index  rose 24.23 points, or 3.21 percent, to 778.12. The Nasdaq  Composite Index jumped 58.09 points, or 4.14 percent, to  1,462.11.

The blue-chip Dow average is now up 4.7 percent for the  month but remains down 15.7 percent for the year to date.

The S&P 500 is now up 14 percent from the bear-market  closing low on March 9, while the Dow is up 13 percent from  its bear-market closing low reached on the same date.

The Dow Jones home construction index rose 6.3 percent  after data showed housing starts jumped 22.2 percent in  February, the biggest percentage rise since January 1990, and  also the first increase since last April.

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