By Chuck Mikolajczak
NEW YORK (Reuters) - Wall Street rose on Wednesday as investors scooped up shares battered in the recent correction and data showed new home sales climbed to their highest level in almost two years.
Industrial and bank stocks were among the best performers as indexes rebounded from a sharp sell-off spurred by fears that European sovereign debt troubles would spark another global financial crisis.
The S&P 500 has fallen more than 10 percent from a closing high on April 23, putting the key index into correction territory.
The CBOE Volatility Index <.VIX> lost 7.6 percent after earlier tumbling more than 30 percent to levels not seen since before the Spanish government took over a local lender on May 22. The bailout raised anxiety about the stability of Europe's financial system.
Earth-moving equipment maker Caterpillar Inc
"A lot of times in significant declines that we've seen -- corrections if you will, 10 percent plus down moves -- you will see the stocks that have bounced the most are the ones that have been hit the hardest," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio.
"The all-clear has not been sounded. But yesterday's mid-afternoon rally through the end of the day was a very good sign, as is today's follow-through."
The Dow Jones industrial average <.DJI> added 13.68 points, or 0.14 percent, to 10,057.43. The Standard & Poor's 500 Index <.SPX> gained 3.14 points, or 0.29 percent, to 1,077.17. The Nasdaq Composite Index <.IXIC> rose 8.60 points, or 0.39 percent, to 2,219.55.
New U.S. home sales hit their highest level in nearly two years in April as buyers rushed to take advantage of an expiring government tax credit.
The Dow Jones U.S. Home Construction index <.DJUSHB> gained 3.3 percent, while the PHLX Housing Sector index <.HGX> climbed 2.8 percent.
Luxury home builder Toll Brothers Inc
The Dow was also lifted as three components got brokerage upgrades, including Boeing Co
U.S. Treasury Secretary Timothy Geithner flew to Europe to press for united action to tackle the deepening debt crisis. The move came as the European Union said it might go it alone with a crisis levy on banks.
Elsewhere on the economic front, orders for durable goods rose in April to their highest level since September 2008.
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
