Dow at New 17-Month High

By PETER A. MCKAY

Industrial and materials stocks led the strongest one-day market gain since the last employment report as traders placed a fresh round of bets on a robust U.S. recovery.

A better-than-expected reading of home sales boosted Caterpillar and other industrial bellwethers early on. As the session drew to a close, investors also piled into other sectors that will benefit most directly if the U.S. economic rebound progresses as Wall Street hopes over the next few months.

The Dow Jones Industrial Average rose for a second straight day, up 102.94 points, or 1%, to end at a fresh 17-month high of 10888.83. Caterpillar was its strongest component, up 4.1%.

The Nasdaq Composite Index was up 0.8%. The S&P 500 was up 0.7%. The broad index's industrial and materials categories rose more than 1% each as gains spread across every sector.

Industrial bellwether General Electric was up 1.4%. AK Steel Holding rose 2.8%, and Nucor rose 3.7%.

Caterpillar and other economically sensitive components rose.
The gains extend a broader streak during which the market has shown extraordinary momentum. The Dow has risen in 10 of the last 12 sessions, dating back to March 5, when investors rejoiced at better-than-expected jobs data for February.

Tuesday's gain was the biggest for a single session since the 122-point Dow surge on the day of the jobs release. The average is up 4.3% since then as traders have become gradually more comfortable with the idea that a U.S. recovery from a historic recession is taking hold.

"People are happy to have some better data, then the [first-quarter earnings season] should be the real test for this market," said Peter Cardillo, chief market economist in Avalon Partners. "The gains we've been seeing while we're waiting for that have been pretty incremental, on low volume. But I think that's good, since we're building a base."

In the day's major economic release, the National Association of Realtors, which reported home resales in February fell 0.6%, better than economists' expectation for a 2% decline, according to a Dow Jones Newswires survey.

Also, the Federal Reserve Bank of Richmond reported economic activity among manufacturers in the central Atlantic region picked up in March. The bank's manufacturing index, shipment index and new orders index all rose from the prior month.

Among stocks in focus, Google shed 1.5% after the company decided to redirect visitors from its mainland China site to uncensored versions of the site in Hong Kong. American depositary shares of Chinese rival Baidu.com rose 2.6%.

KB Home lost 1.7%. The home builder's fiscal first-quarter loss narrowed amid lower write-downs, but the results were worse than analysts had expected.

In other markets, crude-oil futures edged up 31 cents to $81.91 a barrel. The dollar strengthened against both the yen and the euro. Treasury prices slipped. The 10-year note was off 8/32 to yield 3.689%.

—Donna Kardos Yesalavich and Kristina Peterson contributed to this article.
Write to Peter A. McKay at peter.mckay@wsj.com

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