U.S. Markets Rally Late, Close Tuesday On Highs

New York, NY (AHN) - All three major indices closed on their highs as strength in the financial sector and comments from Federal Reserve Chairman Ben Bernanke sparked a late rally.

Bernanke said the Fed is committed to financial stability and may continue its emergency lending to investment banks through 2009.

"The market is bouncing back; yesterday there was a lot of negative news, and clearly the Fed's announcement today is helping. Of course oil coming down also helps," said Noman Ali, portfolio manager with MFC Global Investment Management, according to MarketWatch.

The Dow Jones Industrial Average gained 152 points or 1.35 percent as 22 of 30 Dow components were higher Tuesday. Bank of America (BAC) led the way with a 5.3 percent gain.

The S&P 500 tacked on 21 points, or 1.7 percent, marking its best one-day gain in a month.

The tech sector was strong as the Nasdaq Composite gained 51 points or 2.28 percent.

Of the 10 major economic sectors, eight closed higher Tuesday. Financials led the way gaining 5.7 percent. Commodities were lower with energy and materials being the only sectors down on the session.

With oil falling 3.8 percent to $135.99 a barrel, transportation stocks added 5 percent.

Moving big to the downside was VMware (VMW) after the company announced the departure of its president and CEO and said fiscal 2008 revenue growth would be below prior guidance of 50 percent. Shares of the software company were off 24 percent to $40.24.

On the economic front, the National Association of Realtors said May pending home sales fell 4.7 percent, more than the 2.8 percent expected.

Aluminum company Alcoa (AA) reports earnings after the close Tuesday. They are the first Dow component to announce second quarter earnings, kicking off what is widely considered "earnings season."