Dow up 179 on upbeat housing news

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By Stephen Bernard and Tim Paradis ASSOCIATED PRESS

UPDATED:

NEW YORK (AP) -- Investors restarted Wall Street's rally Tuesday, buying financial and home-builder stocks following a surprisingly upbeat report on home construction.

According to preliminary calculations, the Dow rose 178.73, or 2.5 percent, to 7,395.70.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 24.23, or 3.2 percent, to 778.12, while the Nasdaq composite index rose 58.09, or 4.1 percent, to 1,462.11.

The Russell 2000 index of smaller companies rose 17.23, or 4.5 percent, to 403.59.

Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to a light 1.49 billion shares. Light volume indicates less conviction behind the market's moves.

The government's report that housing starts rose unexpectedly in February more than offset news that Alcoa Inc. is slashing its dividend.

The upbeat construction report provided the latest glimmer of hope for Wall Street and revived interest in the long-suffering housing industry. Stocks began rallying a week ago after Citigroup Inc. said it had operated at a profit in the first two months of the year.

Similarly upbeat assessments from other troubled banks and better-than-expected readings on retail sales have led some investors to believe the market has been too pessimistic about the economy.

Stocks surged last week in a four-session rally that left market barometers up about 10 percent -- the type of gains they might normally take a year to assemble. Buyers stepped in again Tuesday after stocks posted moderate declines on Monday.