U.S. stocks rebounded sharply after Tuesday's opening bell, as fears over China's cash crunch eased and U.S. economic data came in better than expectations.
Global stocks experienced a broad-based selloff on Monday amid fears of the tightening interbank lending in China. But latest remarks from China's central bank soothed market jitters.
Ling Tao, a deputy director of the Shanghai branch of the People's Bank of China, said Tuesday that the bank would be flexible in managing liquidity and would guide market interest rates into a reasonable range.
On the economic front, U.S. home prices posted record monthly gains in April. The S&P/Case-Shiller Home Price Indices showed that average home prices rose 2.6 percent and 2.5 percent for the 10- and 20-City Composites from March to April, according to a report released Tuesday by S&P Dow Jones Indices.
Meanwhile, new orders for manufactured durable goods in May climbed 3.6 percent to 231 billion U.S. dollars, mainly due to more demand for non-defense aircraft, the U.S. Commerce Department said.
In addition, surging consumer sentiment in June and jumping new home sales in May further underpinned the market's rally.
Shortly after the opening bell, the Dow Jones Industrial Average gained 107.34 points, or 0.73 percent, to 14,766.90 points. The S&P 500 rose 14.88 points, or 0.95 percent, to 1,587.97 points. The Nasdaq Composite Index added 33.66 points, or 1.01 percent, to 3,354.42 points.