Wall Street rallies as Ukraine-Russia tensions ease

NEW YORK (Reuters) - U.S. stocks rallied on Tuesday, with the S&P 500 at a record high, as fears eased of a confrontation between Russia and Ukraine and Russian President Vladimir Putin said there was no need to use military force in the Crimea region for now.

The gains follow hefty losses in U.S. equities and other risky assets on Monday. Global stocks rebounded while gold, the Japanese yen and Treasuries prices fell. Crude oil prices, up more than 2 percent on Monday, reversed some of that session's gain.

"Monday's selling and Tuesday's stark reversal have become commonplace in traders' calendars in 2014," said Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut.

"Investors have clearly got an appetite for equities displaying strong momentum no matter whether geopolitical risks or fears for the health of the recovery stand in their path."

The CBOE Volatility index, Wall Street's so-called fear gauge, fell 11.9 percent to 14.09, on Tuesday after rising 14 percent in the previous session.

Putin ordered troops involved in a military exercise near the Ukrainian border back to their bases as he sought to ease tensions a day after Russian stocks, bonds and currency were hammered.

The Dow Jones industrial average <.DJI> rose 230.94 points or 1.43 percent, to 16,398.97, the S&P 500 <.SPX> gained 28 points or 1.52 percent, to 1,873.73 and the Nasdaq Composite <.IXIC> added 73.901 points or 1.73 percent, to 4,351.202.

The S&P hit an intraday record of 1,871.44 while the Nasdaq Composite touched a 14-year high.

"The longer-term trend of the U.S. equity indexes remains positive," but short-term indicators "remain overbought and are peaking as most indexes rally back to resistance at their 2014 highs," said Robert Sluymer, analyst at RBC Capital Markets, LLC in New York.

Disney shares hit a record high after reaching a deal with Dish Network that allows the No. 2 satellite TV provider to carry Disney-owned networks such as ABC and ESPN, and deliver the content outside of a traditional TV subscription. Disney shares were last up 2.8 percent at $81.65 after earlier hitting $82.17.

Qualcomm Inc rose 4 percent to $76.56. The world's biggest cellphone chip maker raised its share repurchase authorization by $5 billion to $7.8 billion and increased its cash dividend by 20 percent.

Shares of RadioShack Corp fell 16.2 percent to $2.28. The struggling retailer said it would close up to 1,100 U.S. stores after a huge drop in holiday sales.

(Editing by Nick Zieminski)

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