Stocks jumped Tuesday, with the Nasdaq posting its biggest gain in nearly three months, after a big increase in existing-home sales suggested that the economy may be able to weather higher interest rates.
The Nasdaq rallied 2%, the S&P 500 rose 1.4% and the Dow Jones industrial average added 1.2%. All three indexes climbed back above their converging 200-day and 50-day moving averages, a bullish indicator for the health of the overall market. In another good sign, volume rose across the board compared to Monday, according to preliminary data.
Machinery, auto parts and consumer-related stocks paced the gains in the stock market today, while miners underperformed as gold prices dropped.
Adobe Systems (ADBE) rose 3% and cleared a 98.10 buy point. Its relative strength line is hitting new highs, which is a bullish indicator, but volume on the breakout was weak.
Monolithic Power Systems (MPWR) rose 2%, climbing above a 66.34 buy point of a cup-with-handle base in heavy volume.
Homebuilders fared well after sales of existing homes soared 16% in April to a seasonally adjusted annual rate of 619,000 units, the highest since January 2008.
Pulte Group (PHM) rose 5%, retaking its 50-day and 200-day moving averages. Lennar (LEN) rose nearly 4% and D.R. Horton (DHI) added more than 4%, retaking its 50-day moving average as it works on a cup-with handle base with a 32.61 buy point.
All but one of the IBD 50 stocks rose, led by NetEase (NTES), which jumped 6%. The Chinese online gaming stock is climbing the right side of a cup-type base with a possible 186.55 buy point.
Blue Buffalo Pet Products (BUFF) was the only decliner, ending down a fraction after erasing an early gain of about 1%. The pet food maker is having trouble clearing a 26.08 cup-with-handle buy point.