US Markets

Stocks rally as Ukraine fears ease; best day of the year for Dow, S&P

Pisani: Historic highs across the board

U.S. stocks jumped on Tuesday, with the Dow and S&P 500 bouncing back after their worst hit in a month, as concerns over the Ukraine ebbed.

"Investors do seemed to have been trained in recent years, as soon as it looks like geopolitical crisis has been averted, to buy. We saw that in Egypt and we saw that in Syria," said Jeffrey Kleintop, chief market strategist at LPL Financial.

"Heading into the week, there was a lot of anxiety out there about how it might escalate, between Russia and the West, and anytime you have superpowers talking like that, it's going to scare the markets. But we knew in the end, cooler heads would prevail," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management. .

(Read: Strategist sees rational end to Ukraine showdown)

But the situation, while much improved, was by no means resolved, and "investor sentiment can turn on a dime," Tanious added.

Reported comments by Vladimir Putin that the Russian president had called troops taking part in military exercises close to Russia's border with the Ukraine back to their bases helped calm worries of an immediate escalation of military force.

In Kiev, U.S. Secretary of State John Kerry on Tuesday told a televised news conference that the United States "extended its deepest condolences" to Ukrainians who took to the streets to demand freedom and were met by sniper fire. "We condemn the Russian Federation's act of aggression," Kerry said.

(Read more: Ukraine crisis: Latest news and market reaction)

The geopolitical friction spurred a run by investors to perceived safe havens on Monday, with gold, the U.S. dollar and Treasury prices rallying. On Tuesday, that trend reversed, although volatility was expected to remain in play as the situation in the Ukraine continues to play out.

Major U.S. Indexes

After jumping 251 points, the Dow Jones Industrial Average added 227.85 percent, or 1.4 percent, to 16,395.88, with Walt Disney leading gains that extended to all 30 of its components.

After clearing its 2014 gain on Monday, the rallied to an intraday record of 1,876.23, and gained 28.18 points, or 1.5 percent, to end at a closing high of 1,873.91. Health care and financials led sector gains that included all 10 of the S&P's major industry groups.

Delta Air Lines rallied 5.7 percent after the carrier reported financial and operating results for February; Apple shares gained after the consumer-technology company said CFO Peter Oppenheimer would retire at the end of September. RadioShack fell sharply after reporting fourth-quarter sales below expectations. Abercrombie & Fitch rose after Credit Suisse Group upgraded the teen-clothing retailer. Facebook rose after a source familiar with the situation told CNBC the social-networking company would buy drone-maker Titan Aerospace for around $60 million.

The Nasdaq surged 74.67 points, or 1.8 percent, to 4,351.97.

Markets react to Putin comments

For every share falling, more than five rose on the New York Stock Exchange, where 852 million shares traded. Composite volume cleared 3.7 billion.

The dollar edged higher against the currencies of major U.S. trading partners and the yield on the 10-year Treasury note used in figuring mortgage rates and other consumer loans rose 10 basis points to 2.699 percent.

Crude futures fell $1.59, or 1.5 percent, to $103.33 a barrel; gold futures shed $12.40, or 0.9 percent, to $1,337.90 an ounce.

—By CNBC's Kate Gibson

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