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US stocks end higher for first session in three on confidence data

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U.S. stocks climbed on Tuesday, with equities bouncing back after two days of losses, as investors embraced data that had consumer confidence hitting a six-year high in March.

"The markets are keying on the consumer confidence number, which surprised on the upside. The U.S. economy is dependent on consumers," said Chris Gaffney, EverBank senior market strategist.

The Conference Board reported consumer confidence rose to 82.3 in March, up from 78.3 the month before; another report from the Commerce Department had new-home sales slipping 3.3 percent in February. And, the S&P/Case-Shiller index of property values in 20 cities climbed 13.2 percent from January 2013.

(Read: housing's mixed signals: Are we in a bubble or not?)

"The February housing numbers have to have some weather-related in them still, so that excuse is still there," said Gaffney.

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After a 130-point climb, the Dow Jones Industrial Average rose 91.19 points, or 0.6 percent, to 16,367.88, with International Business Machines and Cisco Systems leading blue-chip gains that included 21 of its 30 components.

The S&P 500 added 8.18 points, or 0.4 percent, to 1,865.62, with industrials the best performing and consumer discretionary the worst among its 10 major industry groups.

McCormick & Company rallied after reporting first-quarter results and said unfavorable foreign currency exchange rates would cut its 2014 sales by 1 percent. Walgreen jumped after the pharmacy chain said it would shutter 76 stores. Shares of Carnival slid after the cruise operator warned it could record a loss in its current quarter.

After wavering on either side of neutral, the Nasdaq gained 7.88 points, or 0.2 percent, to 4,234.27.

The CBOE Volatility Index (VIX), a measure of investor uncertainty, fell 5.3 percent to 14.29.

The dollar held steady against other global currencies and the yield on the 10-year Treasury note climbed 1 basis point to 2.745 percent.

"The bond markets are more interested in inflation expectations right now, where equity markets are talking about rate cycles. That's why we haven't seen a big move in the 10-year rates. Even with the size of the U.S. balance sheet and the expansion we've seen there, inflation pressures remain at bay," said Gaffney.

Crude futures declined 41 cents cents to $99.19 a barrel; gold futures for April delivery rose 20 cents to $1,311.40 an ounce.

For every two shares sliding, roughly three gained on the New York Stock Exchange, where nearly 645 million shares traded. Composite volume neared 3.2 billion.

Federal Reserve Bank of Philadelphia President Charles Plosser told CNBC Tuesday Fed members found were surprised by the market's reaction to recent policy statements, saying they tried to say quite explicitly that the central bank's view had not changed.

Fed Chair Janet Yellen "threw a lot of cold water on the equity party last week, and now everyone has priced in an increase in rates in the first half of next year, so it will be interesting to see how the housing market responds to that," said EverBank's Gaffney.

On Monday, stocks fell for a second session, with the Nasdaq especially hard hit as investors shed Facebook, Google and other higher flyers.

—By CNBC's Kate Gibson

Coming Up This Week:

Tuesday

4 p.m.: Fed's Lockhart speaks

7 p.m.: Fed's Plosser speaks

Wednesday

Earnings: Paychex

2 a.m.: Fed's Bullard speaks

7 a.m.: Mortgage applications

8:30 a.m.: Durable goods orders for February

9:45 a.m.: PMI services flash

10:30 a.m.: Oil inventories

1 p.m.: Five-year note auction

Thursday

Earnings: Accenture, Lululemon Athletica, Signet Jewelers,Commercial Metals, GameStop, Leidos Holdings, Winnebago Industries, Worthington Industries, Red Hat, Oxford Industries,Restoration Hardware Holdings,Voxeljet

8:30 a.m.: GDP revision Q4

8:30 a.m.: Weekly jobless claims

8:30 a.m.: Fed's Pianalto speaks

10 a.m.: Pending home sales index for February

10:30 a.m.: Natural gas inventories

11 a.m.: Kansas City Fed manufacturing index

1 p.m.: Seven-year note auction

4 p.m. Fed balance sheet/money supply

9:30 p.m.: Fed's Evans speaks

Friday

Earnings: Blackberry

8:30 a.m.: Personal income and consumer spending for February

9:55 a.m.: University of Michigan/Reuters consumer sentiment for March

1:15 p.m.: Fed's George speaks

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