Encouraging news on the economy gave the stock market a boost on Tuesday.
Stocks also rose on expectations that the conflict between Russia and the West wouldn't escalate further. Russia's President Vladimir Putin is preparing to complete the annexation of the Black Sea peninsula of Crimea, but he said Tuesday that he won't take over other areas of Ukraine.
The stock market is recovering this week after logging its biggest weekly drop in almost two months. The S&P 500 has gained 1.7 percent this week after dropping almost 2 percent last week on concerns about slowing growth in China and tensions between Russia and the West over Ukraine.
The annexation of Crimea “is a horrible thing for the world in the long term,” said Uri Landesman, president of Platinum Partners. “But the market doesn't want unrest.”
The Standard & Poor's 500 index rose 13.42 points, or 0.7 percent, to 1,872.25. The Dow Jones industrial average rose 88.97 points, or 0.6 percent, to 16,336.19. The Nasdaq composite climbed 53.36 points, or 1.3 percent, to 4,333.31.
The stock market also got a boost from two technology companies.
Microsoft jumped after Reuters reported that CEO Satya Nadella plans to use his first big press event March 27 to unveil an iPad version of the company's Office software suite. Analysts regard this as a first step for Nadella in repositioning Microsoft as a company that focuses on mobile devices rather than the shrinking market for personal computers.
The company's stock climbed $1.50, or 3.9 percent, to $39.55, its highest level since July, 2000.
Hewlett-Packard rose $1.08, or 3.7 percent, to $30.56 after analysts at Barclays upgraded their outlook on the hardware company and raised their price target on the stock to $38 from $33. They expect HP to return more cash to shareholders and gain market share in the server business from rivals in coming months.
Stocks opened higher after Putin told the Russian Parliament not to believe those who say that the country will look to take over other areas of Ukraine.
The stock market also got a lift from a report that showed inflation remains tame, despite a big rise in the cost of food.
The consumer price index rose 0.1 percent in February, matching January's increase, the Labor Department said Tuesday. In the past 12 months, prices have risen just 1.1 percent, the smallest yearly gain in five months.
That means that the Federal Reserve can continue to provide stimulus to the economy and focus on reducing unemployment and boosting economic growth without having to worry that its policies are stoking inflation.
Fed policymakers started their second meeting of the year on Tuesday. The meeting will end Wednesday and be followed by an early afternoon press conference by Fed Chair Janet Chairman. Most analysts expect the Fed to continue to reduce its economic stimulus by cutting back on its bond purchases. The Fed is currently buying $65 billion of bonds a month to hold down long term interest rates.
Investors were also encouraged by a government report on home building.
While construction of homes fell for a third month in February, the report also showed that applications for building permits reached the highest level in four months. That raised expectations that economic growth would improve in the spring after an unusually cold winter slowed down the pace of home building, said Joe Quinlan, chief market strategist for U.S. Trust.
“Many people in the market fell that were going to get a spring rebound, or snap back, from a sluggish first quarter,” said Quinlan.
Home builders rose after the report was released.
Beazer Homes USA rose 52 cents, or 2.6 percent, to $20.57 and Ryland Group rose $1.23, or 3.1 percent, to $41.40. D.R. Horton, PulteGroup and Lennar also rose.
In government bond trading, the yield on the 10-year Treasury note fell to 2.67 percent from 2.69 percent. The price of oil rose $1.62, or 1.7 percent, to $99.70 a barrel. Gold fell $13.90, or 1 percent, to settle at $1,359 an ounce.
Among other stocks making big moves;
— Nasdaq OMX Group and IntercontinentalExchange Group slid following news that the New York Attorney General, Eric Schneiderman, was taking a closer look at services offered by stock exchanges to high-frequency traders. Schneiderman said that when exchanges allow trading firms to put their computers within the exchanges' data centers, it gives these firms an unfair advantage. Nasdaq OMX lost $1.23, or 3.1 percent, to $38.50. ICE lost $3.22, or 1.5 percent, to $205.94.
— GameStop fell $1.36, or 3.4 percent, to $38.39 after Wal-Mart said it plans to let video game owners trade in used games in Wal-Mart and Sam's Club stores in exchange for store credit. Previously they offered trade-ins on a more limited basis online.