Uncertainty pervaded the markets in recent days, as investors tried to assess whether the inability of a Dubai investment fund to keep up with $59 billion in debt payments would rattle banks and other emerging economies.
But on Tuesday, investors across the world seemed more confident that the crisis was contained. A pledge by Dubai World, the emirate’s investment vehicle, to restructure its debt helped calm investors even though the company said late Monday that it was seeking to renegotiate only the $26 billion in obligations held by its troubled real estate developer, Nakheel.
“It’s a huge sigh of anticipatory relief that Dubai is not going to blow up in the global investor’s face,” said M. Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Okla. “What this market needs is to be able to trust the worldwide comeback and to know that worldwide economies are going to hold strong.”
The Dow Jones industrial average rose 126.74 points, or 1.23 percent, to 10,471.58 — a 14-month high. The Standard & Poor’s 500-stock index jumped 13.23 points, or 1.21 percent, to 1,108.86, also to a 14-month high.
The Nasdaq composite index gained 31.21 points, or 1.46 percent, to 2,175.81. The increases were broad-based, led by shares of utility and telecommunication companies.
Shares of Comcast, the nation’s largest cable operator, rose 2.1 percent after reports said General Electric had reached a tentative deal that would clear the way for the sale of NBC Universal to Comcast. Shares of G.E. gained 0.94 percent.
In addition to the Dubai news, investors took in three reports on Tuesday that, while not glowing, largely beat expectations and added optimism to the forecast for an economic rebound.
An index on tentative home sales compiled by the National Association of Realtors reached its highest level in three years in October, aided by the allure of a government-financed credit of up to $8,000 for first-time home buyers.
A separate barometer on manufacturing activity, from the Institute for Supply Management, showed a slight drop in the pace of expansion in November, falling short of Wall Street’s expectations. The report, however, recorded an increase in new factory orders in November, suggesting growth.
Finally, the Commerce Department said construction spending remained flat in October, at $910.77 billion, as a rise in residential spending helped offset losses in commercial spending. Excluding residential improvements, which are difficult to estimate, spending fell 1.1 percent. The government also revised its September data, recording a 1.6 percent decrease rather than a 0.8 percent increase in construction spending.
Hank B. Smith, chief investment officer for Haverford Investments, said that while the economic reports, taken together, did not show great gains, they reassured investors. “All recoveries go in fits and starts,” he said. “If you look at the reports as a whole, clearly we are recovering.”
Commodities posted gains on Tuesday. Gold shot past $1,200 an ounce for the first time, but then retreated slightly, ending the day at $1,197 an ounce. Crude oil prices rose $1.09, to $78.37 a barrel.
The dollar continued to weaken, trading at $1.51 against the euro.
The Treasury’s benchmark 10-year note fell 23/32, to 100 25/32, and the yield rose to 3.27 percent from 3.20 percent late Monday.
Later this week, investors will examine two crucial snapshots of the health of the economy. On Thursday, retailers will report November sales figures, giving a sense of the strength of holiday sales. On Friday, the Labor Department will release its monthly unemployment report.
Following are the results of Tuesday’s auction of four-week notes:
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