Late Session Rally Lifts S&P 500 11%

16:20 ET
Late Session Rally Lifts S&P 500 11%
Dow +889.35 at 9065.12, Nasdaq +143.57 at 1649.47, S&P +91.59 at 940.51
[BRIEFING.COM] A volatile session gave stock market bulls something to cheer about, with the Dow surging 889 points on Tuesday, as bargain hunting and short-covering offset the weakest consumer confidence reading on record.

The S&P 500 rose 3.9% shortly after the opening bell, buoyed by strength in overseas markets. The index then fell to a loss of 0.4% due to the bearish consumer confidence news, only to rally into the close at session highs with a gain of 10.8%.

Strength was broad-based with all ten economic sectors posting a gain of at least 7.5%.

Retailers rallied 13.6%, with Target (TGT 38.44, +5.75) gaining 11.7%. Pershing Square Capital Management shared ideas with Target related to an alternative ownership structure of Target's real estate. The consumer discretionary sector rose 13.1%.

The energy sector rose 11.9%, lifted by better-than-expected results at Occidental Petroleum (OXY 49.77, +7.69) and Valero Energy (VLO 16.83, +1.72). The sector also received an indirect boost from BP (BP 45.52, +6.37), which posted stronger-than-expected earnings and revenue growth.

On a related note, the materials sector climbed 12.6%, aided by better-than-expected earnings at U.S. Steel (X 32.25, +4.43).

Boeing (BA 48.85, +6.49) climbed 15.3% after it reached a four-year tentative labor agreement with its striking machinists union. The union, Boeing's largest, has been on strike since the beginning of September due to disagreements on compensation, benefits and job security. The industrials sector rose 10.0%.

In overseas trading, Asian markets rallied with Japan's Nikkei closing up 6.4% and Hong Kong's Hang Seng surging 14.4%. European stocks rose 2.3%. Germany's DAX surged 11.3% as Volkswagen spiked 81.7%, marking a two-day gain of 348% due to a short-covering fueled rally after Porsche said it was increasing its stake in the automaker on Sunday.

The gains in Volkswagen sparked some volatility in the U.S. market, with Goldman Sachs (GS 94.59, +1.71) dropping as much as 11% on speculation that it was exposed to Volkswagen short positions. CNBC reported its sources at Goldman said the company had no significant losses related to Volkswagen. The financial sector rose 12.5%.

In economic news, it was expected that consumer confidence would fall in October given the recent market turmoil, but the severity of the decline was not anticipated. Specifically, consumer confidence plummeted 23.4 to 38.0 in October, according to the Conference Board's survey. This was worse than the expected reading of 52.0. It marks the lowest level on record, which dates back to 1967.

August home prices in 20 major metro areas fell 16.6% year-over-year, according to the S&P/Case-Shiller Index, which matched expectations. Home prices have fallen on a year-over-year basis for 20 straight months.

In currency trading, the dollar soared 4.1% against the yen after reports indicated that the Bank of Japan is considering cutting its benchmark interest rate to 0.25% from 0.50%.

..Nasdaq 100 +10.9%. ..S&P Midcap 400 +8.6%. ..Russell 2000 +7.6%.