US stocks rose the most in about a month on Tuesday, led by retail shares such as Home Depot Inc as investors bet falling crude oil prices will boost consumer spending and lift corporate profits while easing inflation.
Home Depot, the top US home improvement chain, led the Dow's surge to near the highs seen in May. The S&P retail index shot up 3.1 percent - its biggest one-day percentage gain in more than three years.
A stronger-than-expected quarterly profit from Best Buy Co Inc, the top US electronics chain, gave investors another reason to buy retail stocks. "As prices for crude and gas come down, people are feeling that energy costs will be less of a drag on the economy," said Christopher Zook, chairman and chief investment officer at CAZ Investments in Houston, Texas. "So that's making people a little more optimistic about the outlook."
The Dow Jones industrial average climbed 101.25 points, or 0.89 percent, to end at 11,498.09. The Standard & Poor's 500 Index gained 13.57 points, or 1.04 percent, to finish at 1,313.11. The Nasdaq Composite Index advanced 42.57 points, or 1.96 percent, to close 2,215.82.
Tuesday's gains brought the Dow to just 1.2 percent below its high for the year in early May, when it came within 80 points of its record high of 11,750.28 set on January 14, 2000. The rally pushed the Nasdaq back into positive territory for the year. The Nasdaq is now up 0.5 percent for the year. Tuesday marked the third straight session of gains for all three indexes.
Investors also snapped up technology shares, with shares of wireless chip maker Qualcomm Inc leading the Nasdaq's advance. Qualcomm gained 2.3 percent, or 84 cents, to $37.65. Shares of home builders such as Toll Brothers Inc were among the session's biggest gainers as investors bet that low US Treasury debt yields signal no further increases in interest rates.
Home Depot shares, rose 4.6 percent, or $1.60, to end at $36.66 on the NYSE. It ranked No 2 among the contributors to the S&P 500's gain - its largest in nearly a month. Best Buy shares realised their biggest one-day percentage advance in more than a year, rising 9.2 percent, or $4.37, to $52.14 on the NYSE. Toll Brothers finished up 4.1 percent, or $1.08, at $27.70, also on the NYSE.
Financial shares also shot higher, after Goldman Sachs Group Inc, the No 3 US investment bank, reported stronger-than-expected quarterly results. Its stock rose 4.8 percent - its biggest one-day gain in six months. In NYSE trading, Goldman Sachs shares closed at $158.29, up $7.29.
On the New York Mercantile Exchange, crude oil for October delivery fell for a seventh straight session, losing $1.85, or 2.8 percent, to settle at $63.76 a barrel.
Volume was active on the NYSE, where about 1.80 billion shares changed hands, above last year's average daily volume of about 1.61 billion shares. On the Nasdaq, about 2.05 billion shares traded, exceeding last year's average daily volume of about 1.80 billion. Advancers outnumbered decliners by a ratio of about 3 to 1 on the NYSE, and by about 11 to 4 on the Nasdaq.
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