Stocks jumped as oil prices dropped nearly $5 on news of an unexpected build in crude inventories.
Also giving a boost to the market wereeconomic reports that showed a smaller-than-expected drop in new-home sales and a stabilization in durable-goods orders.
Light, sweet crude fell below $133 a barrel after the EIA reported an 800,000-barrel build in crude inventories; economists had expected a 1.4-million-barrel draw.
New-home sales fell 2.5 percent in May to an annual rate of 512,000 units,after a 4.8 percent advance in April. It was the fifth decline in the past six months but better than the 510,000 pace economists had expected. In annual terms, home sales are down more than 40 percent.Inventories rose to a 10.9-month supply.
Earlier, a report showed mortgage applications fell for a second straight week, hitting their lowest level since December 2001 even as interest rates fell.
Orders for durable goods, which are items that are meant to last three years or more such as appliances and cars, were unchanged in May . April was revised to show a 1-percent drop, more severe than the 0.6-percent slide previously reported. Demand for nondefense capital goods excluding aircraft, which is a closely watched gauge of business spending, fell by 0.8 percent last month.
The market isn't expected to make too many fast moves today as traders watch and wait for the Federal Reserve's decision on interest rates, due out at 2:15 p.m. ET.