A desperately-needed dive in crude oil prices sparked a rally on Wall Street on Tuesday as the market bounced back from an ugly trading week. 

Today's Market

The Dow Jones Industrial Average rose 68.72 points, or 0.55% to 12548.35, the Standard & Poor’s 500 index gained 9.42 points, or 0.68%, to 1385.35 and the Nasdaq Composite Index picked up 36.57 points, or 1.50%, to 2481.24. The consumer-friendly Fox 50 rose 6.50 points, or 0.67%, to 976.50. 

After fluctuating between gains and losses, the Dow turned higher Tuesday afternoon as it became clear that crude oil prices were going to close firmly in the red. 

In addition to the oil prices, traders were also digesting a better-than-expected new home sales report and ominous data showing home prices fell to 20-year lows in April and consumer confidence plunged to a 16-year low.

IBM (IBM) and Citigroup (C) led the Dow on Tuesday, rising 2.5% each. On the downside, energy titans ExxonMobil (XOM) and Chevron (CVX) fell about 1% each on the lower oil prices. 

The Nasdaq Composite, which had fallen five of the previous six trading days, advanced much further than the broader market on Tuesday. United Airlines (UAUA) jumped 6.9% to lead the Nasdaq 100. Also, several big-name tech stocks like Google (GOOG) and Oracle (ORCL) rose about 3% each. 

The bears on Wall Street failed to carry their momentum from last week into Tuesday's trading. Stocks tanked last week on a combination of surging oil prices and new pessimism about the chances the economy will turn around during the second half of 2008. 

In fact, it was the worst week for stocks in three months, including three separate triple-digit plunges on the Dow. The blue-chip index lost nearly 4% of its value or more than 500 points. 

It's clear that Wall Street benefited from a $3.34 plunge in crude oil prices, the largest one-day drop since March 31. Crude closed at an eight-day low of $128.85 a barrel. As has been the case for much of the past few weeks, the stock market mirrored the movement of oil prices, which are still up more than 100% from a year ago. As oil prices fell, stock prices rose.

"We've boiled this whole game down to one commodity. I never in my lifetime thought I would say oil is down to $128," said Art Hogan, chief market strategist at Jeffries & Co. 

There was plenty of economic data for the bears to use as a reason to spark selling on Tuesday, including the S&P Case-Shiller's March 10-City home price index. The index tumbled by 15.3% -- the largest decline in the index's 20-year history. While falling home prices are troubling for homeowners as it affects their wealth, experts said prices must drop before the housing market can turn around. 

On the other hand, the government said on Tuesday new home sales unexpectedly rebounded in April, rising 3.3% to 526,000. Economists surveyed by Dow Jones had been expecting a decline in sales. 

Shares of home builders like Lennar (LEN) and KB Homes (KB) as well as home-related stocks like Home Depot (HD) or Bed Bath and Beyond (BBBY) rose on the latest reports. 

Meanwhile, Wall Street received more evidence of how tumbling home prices and soaring energy and food costs have impacted consumers. The Conference Board, a private research group, said consumer confidence plunged to 57.2 in May, compared to estimates of a 60.0 reading. It's the lowest level for consumer confidence since Oct. 1992. 

Corporate Movers

UBS (UBS) tumbled 13.4% after it warned of trouble ahead in its non-U.S. real estate assets. According to The Wall Street Journal, the Swiss bank said in a prospectus it may have to record losses due to the volatile and challenging markets. 

General Motors (GM) hit 26-year lows after Citi cut the auto maker to “hold” from “buy” and lowered its price target to $21 from $32 on liquidity worries and high oil prices. The Citi analyst, Itay Michaeli, also cut his price target on Ford (F) to $7 from $8.50. Michaeli also lowered his price target on other auto-related companies like Johnson Controls (JCI), Lear (LEA) and Tenneco (TEN).

Lehman Brothers (LEH) closed 3% higher even after Bank of America (BAC) said it now sees a second-quarter loss of 50 cents per share for the investment bank, according to Dow Jones. Wall Street is currently expecting a 47 cent profit from Lehman. Also, Bernstein reportedly slashed its estimate on Lehman to a loss of 15 cents, compared to its earlier estimate for a profit of $1.38.

Lam Research (LRCX) gained 5.8% after the chip maker was reportedly upgraded to "buy" from "neutral" by Merrill Lynch (MER). According to Thomson Reuters, the firm cited an expected turnaround in 2009 and raised its price target to $47, $9 higher than the stock's closing price on Friday. 

LG Electronics is seriously looking at acquiring General Electric's (GE) appliance unit. "We are looking into it very carefully. I cannot share with you more than that," LG CEO Yong Nam said at a news conference, according to The Wall Street Journal. GE put its appliance unit up for sale last week.

Vodafone Group (VOD) turned a profit in its full-year results and revealed a change at the top as CEO Arun Sarin stepped down. The world’s largest mobile phone company by sales will now be run by Vittorio Colao, a deputy of Sarin’s. Vodafone’s sales rose 14% to $70.2 billion and earned a profit of $13.25 billion.

Jamba Juice (JMBA) gained 14.1% as the beverage company rolled out a new product line with Nestle USA (NESN). The announcement of ready-to-drink beverages comes hours before the Jamba is expected to post a loss of 12 cents per share for the first quarter. 

Express Scripts (ESRX) rose 2.1% on a $9.5 million agreement to settle a dispute with 28 states. The pharmacy benefits manager had been in hot water for allegedly violating consumer protection laws by switching cholesterol drug brands to control costs. 

Darden Restaurants (DRI) was up 4.5% on an analyst upgrade to “buy” from “neutral” by Merrill Lynch (MER). The company owns and operates more than 1,300 restaurants, including Red Lobster and Olive Garden.

World Market

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, fell 13.87 points, or 0.37%, to 3711.03. The FTSE 100, London's benchmark index, lost 28.80 points, or 0.47%, to 6058.50.

On the continent, Paris's CAC 40 Index dropped 31.28 points, or 0.63%, to 4906.56 while Germany's DAX rose 4.82 points, or 0.07%, to 6958.66.

In Asia, Tokyo's Nikkei 225 Index gained 203.12 points to 13893.31. Hong Kong's Hang Seng Index rose 154.73 points to 24282.04.