US stocks extended gains on Tuesday, with the S&P 500 and the Nasdaq rising more than 2% as stronger-than-expected data from overseas sparked buying before a keenly awaited speech by Federal Reserve Chairman Ben Bernanke this week.
The Dow Jones Industrial Average was up 197.39 points, or 1.82%, at 11,052.04. The Standard & Poor's 500 Index was up 22.51 points, or 2.00%, at 1,146.33. The Nasdaq Composite Index was up 53.32 points, or 2.27%, at 2,398.70.
Other data on Tuesday showed the US housing sector weaker than expected. It was the latest in a string of discouraging reports that some investors speculate will spur the Fed to take stimulative measures.
"The data today has raised hopes about the Fed's actions and after four straight days of losses and a flat market yesterday, people are willing to jump at buying opportunities," said Larry Peruzzi, senior equity trader at Cabrera Capital markets in Boston.
Reports on China's factory sector and German business activity pointed to slowing growth but were not as weak as some had feared.
Early trading was volatile, with the steep gains before the market's open quickly eroding. Then stocks rallied after the US home sales data. However, some questioned whether trading could follow Monday's path in which early advances ended with only modest market gains.
"These pockets of good news from Asia and Europe suggest that the wave of bad news that had been expected isn't coming forth like people had been worried about," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.
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