New York - US stocks closed solidly higher on Tuesday, buoyed by a better-than-expected report on December retail sales covering the holiday shopping season.
The Dow Jones Industrial Average climbed 115.92 points (0.71%) to 16,373.86.
The broad-market S&P 500 advanced 19.68 (1.08%) to 1,838.88 and the tech-rich Nasdaq rose 69.71 (1.69%) to 4,183.02.
"The stock gods decided to buy the dip on Tuesday, a day after the biggest sell-off in about three months," said Jon Ogg at 24/7 Wall St.
The indices recovered from Monday's dive as investors digested an encouraging report on US retail sales, a part of the consumer spending that drives the economy.
The Commerce Department said retail sales rose 0.2% in December, surprising analysts who had estimated no change.
"Overall, the December retail sales figures come as somewhat of a relief after Friday's dismal employment report appeared to be a slight cause for concern following a series of positive economic data," said Michael Soni of BBVA Research.
JPMorgan Chase and Wells Fargo kicked off the banking sector's fourth-quarter earnings season with modestly better-than-expected results.
Dow member JPMorgan inched up 0.1%. The nation's largest bank posted a 7.2% drop in fourth-quarter earnings, while adjusted $1.40 earnings per share beat expectations by five cents.
Wells Fargo also added 0.1% after posting a 10.4 percent profit rise for the fourth quarter, with earnings of $1.00 per share two cents above estimates.
Technology shares rallied. Microsoft led the Dow higher, advancing 2.3%. Intel surged nearly 4.0% after a JPMorgan upgrade.
Tech heavyweight Apple jumped almost 2.0%.
Time Warner Cable gained 2.7% after rejecting a third takeover proposal from Charter Communications as "grossly inadequate". Charter rose 2.3%.
Google gained 2.4% after announcing it was buying Nest Labs, a smart-home company that makes thermostats and smoke alarms, for $3.2BN in cash.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.87% from 2.83% on Monday, while the 30-year increased to 3.80% from 3.77%. Bond prices and yields move inversely.