US stocks rose on Tuesday, led by technology companies such as Apple Inc, as investors bet that a sharp drop in crude oil prices will help shore up consumer and business spending on tech gear. A 2.6 percent drop in oil prices was a welcome development after oil prices hit a record above $135 barrel last week, fanning worries about the outlook for corporate profits and a slowdown in consumer spending.
Shares of consumer-oriented companies, including retailers, gained along with technology shares, even as energy companies, including Exxon Mobil Corp, declined in sync with oil prices.
Shares of Apple, the maker of the iPhone and the iPod, jumped 2 percent, while Google Inc, the leading Internet search company, gained almost 3 percent. They were the Nasdaq's top two advancers. International Business Machines Corp led the Dow's gainers.
"Oil being down helps because people lately seem to be thinking of technology as discretionary," said Peter Jankovskis, director of research, at OakBrook Investments in Lisle, Illinois. "I really think what we're doing is building a very solid base for a strong rally to end the year."
The Dow Jones industrial average climbed 61.80 points, or 0.50 percent, to 12,541.43. The Standard & Poor's 500 Index gained 8.39 points, or 0.61 percent, to 1,384.32. The Nasdaq Composite Index shot up 31.36 points, or 1.28 percent, to 2,476.03.
Home builders were also among standouts following a report that showed a surprise increase in April new-home sales. The Dow Jones home construction index rose 1.85 percent. Shares of luxury home builder Toll Brothers added 1.6 percent to $21.44.
Airline stocks also headed higher on lower crude oil prices, with the airline index up almost 4 percent. Apple shares climbed to $185.11 on the Nasdaq, while Google shares climbed to $560.61. IBM, a technology services company, gained 2 percent to $126.79. on the New York Stock Exchange and was the S&P 500's top boost, behind Google.
US crude oil for July delivery fell $3.46, or 2.6 percent, at $128.73 a barrel amid a stronger dollar and demand concerns. Energy shares were top drags on the broad S&P 500, with Exxon Mobil falling 0.9 percent to $89.95 and Chevron Corp down 1.2 percent at $99.52. The Commerce Department reported that new-home sales rose in April, marking the first increase since October, although the gain came after a big downward revision to the prior month.