Markets Rally, Start Third Quarter Higher

New York, NY (AHN) - Following a dismal second quarter, U.S. markets went into rally mode in the third quarter as all three major indices pared early losses, closing higher on Tuesday.

Markets received some positive data as the June Industrial Services Manufacturing index was reported at 50.2, up from 49.6 in May. Any ISM index reading above 50 is considered expansion in manufacturing.

May construction spending was lower, falling 0.4 percent month-over-month. However, the change was better than the 0.6 percent decline economists were expecting.

General Motors provided a spark when the automaker reported a smaller decline in June automobile sales than analysts had expected. GM shares gained 2 percent on the session, closing at $11.75.

The Dow Industrials added 32 points or 0.3 percent after being down more than 150 points on the session. The S&P 500 gained 5 points or 0.4 percent while the tech-heavy Nasdaq Composite added 12 points or 0.5 percent on Tuesday.

The financial sector was a main catalyst in Tuesday's market rally. The sector finished 1 percent higher after trading down nearly 2.8 percent in early trading.

The dollar index moved lower 0.1 percent to 72.4.

Oil closed the session on the New York Mercantile Exchange higher $1.06 a barrel to $141.06.

Weekly oil inventories are reported Wednesday at 10:35 a.m. Eastern time.