Dow Soars More Than 200 Points

Stocks erased the month’s earlier loses Wednesday after a stronger-than-expected increase in pending home sales restored investors’ optimism.

The Dow Jones industrial average soared 225.52 points, or 2.25 percent, to 10,249.54. The S&P 500 gained 27.67 points, or 2.58 percent, to 1,098.38. The NASDAQ jumped 58.74 points, or 2.64 percent, to 2,281.07.

The major indexes erased Tuesday’s losses after The National Association of Realtors announced Wednesday that its index of contracts on existing homes rose six percent in April. The increase was in line with forecasts from economists surveyed by Thomson Reuters. However, analysts widely expect housing data to weaken in the coming months because a tax credit extended by the federal government expired at the end of April.

Stocks also got a boost from a rebound in energy companies and the automotive industry. Many automakers posted double-digit sales jumps for the month of May.

Detroit automakers Ford, General Motors Co. and Chrysler Group LLC saw double-digit sales gains over the same month last year. Several Japanese, South Korean and European car makers also saw increases of 20 percent or more. Toyota’s sales rose just seven percent over last May.

Jobs: Investors are now awaiting the Labor Department’s monthly employment report on Friday. It is widely regarded as the most important economic report each month because high unemployment remains a major obstacle to a sustained recovery.

Economists predict the unemployment rate dipped to 9.8 percent in May from 9.9 percent in April and that employers added 513,000 jobs. Weekly reports on initial claims have hovered close to 450,000 throughout the year.

World Markets: The CAC 40 in France and FTSE 100 in Britain slid a fraction of a percentage point while Germany’s DAX ended the day near opening levels.

Asian shares ended the day mixed. The Shanghai Composite in China gained 0.12 percent. Japan’s Nikkei ended the down 1.12 percent while the Hang Seng in Hong Kong fell 0.13 percent.

Currencies & Commodities: The euro continued its fall near a fresh four-year low as the dollar gained ground in the euro zone. The euro fell an additional 0.97 percent to $1.2217 while the British pound gained against the dollar to $1.4659.

The greenback posted moderate gains against the Japanese yen and Chinese yuan.

The price of oil gained 28 cents to $72.86 a barrel for July delivery. Oil prices have fallen more than 16 percent over the last month. Prices fell almost two percent Tuesday after a trio of reports showed manufacturing activity slowed in China, Europe and America.

Gold prices slipped $4.20 an ounce to $1,220.60 on the New York Mercantile Exchange. Swiss investment bank UBS said Wednesday that demand for gold exchange-traded funds hasn’t dipped, although the growth in total gold holdings has slowed over the past week.