Market Wrap for Tuesday, May 28: Bull Run Continues as Economic Data Sparks Another Rally

The U.S. stock market had another strong session on Tuesday. A report showing that home prices jumped the most in seven years in March and a steep climb in consumer confidence for May triggered more optimism on Wall Street.

Although stocks finished off of their best levels of the day, the Dow still managed another triple-digit gain as the major averages continue their bull run in 2013.

Although investors should be on watch for a potential correction in the wake of the emerging exuberance, the trajectory for this market continues to look up.

Major Averages

The Dow Jones Industrial Average rose 106 points, or 0.69 percent, to 15,409.

The S&P 500 climbed 10 points, or 0.63 percent, to close at 1,660.

The Nasdaq rose almost 30 points, or 0.86 percent, to 3,489.

Consumer Confidence

The Conference Board's Consumer Confidence Index showed a sharp rise in May, helping to trigger investor risk appetite on Tuesday. The index rose from 68.1 in April to 76.2 in May. This compared to consensus estimates calling for a rise to 72.5. The latest reading was the highest since February 2008.

Commodities

Energy prices headed higher along with other risk assets on Tuesday. NYMEX crude futures added a little better than 1 percent to $95.15 late in the day. Brent contracts were up 1.63 percent to $104.29 at last check. Natural gas prices fell a little less than 2 percent to $4.16 to start the trading week.

Precious metals as the stock market rallied again. COMEX gold futures fell 0.43 percent to $1,380.60 while silver was last trading down a little better than 1 percent to $22.23. Copper futures added 0.58 percent on Tuesday.

In the grain complex, corn futures jumped almost 3 percent on the session. Wheat traded down a little more than 0.50 percent. Movers in soft commodities included a loss of 1.83 percent in cocoa and 3.36 percent in lumber prices.

Bonds

Bond prices plunged on Tuesday as investors reacted to signs of an improving economy. Near the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) was down 2.29 percent to $114.10. The fall in prices drove yields markedly higher.

The yield on the 2-Year Note rose three basis points to 0.28 percent. The 5-Year Note yield added eleven basis points to 1.00 percent while the 10-Year yield surged fourteen basis points to 2.15 percent. The 30-Year Bond yield jumped twelve basis points to 3.29 percent.

Currencies

Strong economic data pushed the U.S. dollar up on the session. The PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was last up 0.62 percent to $22.85.

The closely watched EUR/USD pair was last trading down 0.46 percent to $1.2875. The dollar also rose against the yen, with the USD/JPY last trading up around 1 percent. The USD/CAD climbed 0.50 percent on the session.

Volatility and Volume

The VIX climbed a little better than 2 percent on Tuesday despite a rally in the stock market to start the week. Late in the session the widely watched barometer of market fear was trading at 14.32.

Volume was slightly lighter than normal on Tuesday. Around 125 million SPDR S&P 500 ETF (NYSE:SPY) shares traded hands compared to a 3-month daily average of 127 million.

Stock Movers

Tesla Motors (NASDAQ:TSLA) jumped more than 12 percent on Tuesday. The stock has been on fire since the company reported its first-ever profit earlier in May.

Federal-Mogul (NASDAQ:FDML) was trading up around 9 percent heading into the close. The reason for the move was not readily apparent, but auto-parts manufacturers had a strong day overall.

Arena Pharmaceuticals (NASDAQ:ARNA) traded up around 8 percent near the close on a technical breakout.

Tiffany (NYSE:TIF) jumped a little better than 4 percent on the session after the company's fiscal first-quarter results.

Shares of Vipshop Holdings (NYSE:VIPS) were down almost 15 percent near the close. The stock was downgraded at Deutshe Bank.

Exelon (NYSE:EXC) fell a little less than 8 percent on the session after a Deutsche Bank analyst downgraded the stock from Buy to Hold.