By Lewis Krauskopf
NEW YORK (Reuters) - Wall Street climbed on Tuesday, buoyed by energy shares as sliding oil prices stabilized and by fairly healthy data on U.S. economic growth, while the dollar fell for a third consecutive session.
U.S. crude prices settled up 0.9 percent to $36.14 a barrel. Brent fell 0.6 percent to $36.13 a barrel, after trading higher earlier in the session.
Wall Street has been closely correlated with energy prices in recent weeks as crude has extended a 1-1/2-year slide this month and plumbed fresh multi-year lows.
"The oil price is still the big driver of market sentiment at the moment for stock markets, but I'm not sure if it will hold above those lows, given the concerns about a glut of supply," said Hantec Markets' analyst Richard Perry.
The Dow Jones industrial average was up 143.31 points, or 0.83 percent, to 17,394.93, the S&P 500 gained 14.47 points, or 0.72 percent, to 2,035.62 and the Nasdaq Composite added 24.18 points, or 0.49 percent, to 4,993.10.
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The S&P energy sector index <.SPNY> rose 1.4 percent, while the materials group <.SPLRCM> also gained 1.4 percent and industrials <.SPLRCI> rose 1.2 percent.
Noting that those three sectors are among those "that have been blasted the most" this year, Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said the stock rally "could be simply an oversold bounce."
The pan-European stock index edged down 0.04 percent. Spain's IBEX <.IBEX> rose 0.5 percent, rebounding following a selloff in the previous session after an inconclusive Spanish election result.
MSCI's all-country world index rose 0.6 percent.
Investors digested mixed data out of the United States.
U.S. home resales posted their sharpest drop in five years in November, according to the National Association of Realtors, in a potential warning sign for the U.S. economy.
A separate report from the Commerce Department showed the country's gross domestic product grew at a 2.0 percent annual pace in the third-quarter, a fairly healthy clip, supported by strong consumer and business spending.
The U.S. economic growth and inflation data reinforced the view that the Federal Reserve would proceed with a steady pace of interest rate increases next year, which sent shorter-dated Treasury yields modestly higher.
U.S. 30-year Treasury yields rose on the recovery in U.S. crude oil prices, which suggested marginally higher inflation, analysts said. Higher inflation tends to lead traders to sell long-dated Treasuries since inflation erodes interest payouts on those bonds.
"This data is a little better for the economy than expected, so that makes it less likely that (the Fed's) tightening programme is going to be derailed," said David Coard, head of fixed income sales and trading at Williams Capital Group in New York.
Benchmark 10-year Treasury notes were down 11/32 in price to yield 2.2357 percent, from a yield of 2.197 percent late on Monday. U.S. 30-year Treasury bonds were down 24/32 in price to yield 2.9619 percent, from a yield of 2.925 percent late on Monday.
The dollar index , which tracks the greenback against a basket of currencies, fell 0.2 percent. The euro rose 0.5 percent against the dollar.
"There's a lack of clear momentum for the dollar in the past week," said Brian Dangerfield, currency strategist at RBS Securities in Stamford, Connecticut.
Spot gold slipped 0.5 percent after two sessions of gains.
Copper fell 1.2 percent as traders were reluctant to push the metal above Monday's five-week peak given slowing economic growth in China.
(Additional reporting by Sam Forgione and Richard Leong in New York, Dhara Ranasinghe and Sudip Kar-Gupta in London, and Abhiram Nandakumar in Bengaluru; Editing by Bernadette Baum and Meredith Mazzilli)