Stocks jump after home prices, confidence surge

NEW YORK (AP) — Stocks surged today, restarting a rally that brought the market to record highs this year, after U.S. home prices rose the most in seven years and consumer confidence reached a five-year high.

The Dow Jones industrial average climbed as much as 218 points during morning trading as traders returned from the Memorial Day holiday. The yield on the 10-year Treasury note climbed its highest level in more than a year as investors moved money out of safe assets and into riskier ones like stocks.

The jump in home prices reinforced a theme that has been a major factor behind the 17 percent surge this year in the Standard & Poor's 500 index: a strong recovery in the housing market.

"They say the stock market tends to lead the economy. Now we're starting to see the improvement on the economic front, so there's some justification for this rally," said Ryan Detrick, a senior technical strategist at Schaeffer's investment research.

The market is coming off a rare loss last week. Traders worried that the Federal Reserve might slow its extraordinary economic stimulus measures, which have been another factor behind the stock market's advance this year. The Dow and the S&P 500 had their first losing weeks in a month.