US stocks rebounded on Tuesday a day after a sharp pullback as the market digested better-than-expected earnings reports from the retail sector and mixed data on housing and inflation.

The blue-chip Dow Jones Industrial Average advanced 82.60 points (0.90 percent) to 9217.94 while the tech-heavy Nasdaq composite climbed 25.08 points (1.30 percent) to 1955.92.

The broad-market Standard & Poor's 500 index rose 9.94 points (1.01 percent) to 989.67 after struggling to sustain any move above the 990 mark, a near-term point of resistance.

The rebound came after the major indices posted their worst single-session percentage loss in six weeks on Monday amid a global stock market rout triggered by fears of overblown hopes for recovery from the worst world slump in seven decades.

"A series of better-than-expected earnings reports enticed bulls back into the market," analysts at Charles Schwab & Co said in a report, citing especially companies such as home improvement giant Home Depot and discount retailer Target.

Home Depot topped profit expectations by reporting a 7.2 percent drop in earnings in the second quarter compared with the same period last year.

Slammed by recession and the near-collapse of the US housing market, Home Depot's sales were down 9.1 percent from a year ago, bringing in a total of $19.1-billion in the quarter.

Market sentiment also received a lift from surging investor confidence in Germany.

The closely watched ZEW investor confidence index surged 16.6 points to reach a three-year high of 56.1 points, smashing economists' expectations.

The surprisingly strong gain followed news last week that Germany and France, the eurozone's biggest economies, had returned to growth unexpectedly in the second quarter, stoking recovery hopes.

Investors remained cautious however ? turnover was thin ? after the US government reported on Tuesday that home construction declined unexpectedly in July and US wholesale prices were down more sharply than expected in the same month.

"There wasn't much conviction behind the advance since trading volume was exceptionally low. What's more, stocks struggled to break above near-term resistance levels," analysts at Briefing.com said in a note to clients.

Home Depot was among the gainers, rising 3.14 percent to $26.93 after its earnings came in above analysts' expectations.

Target also jumped ? by 7.55 percent to $44.32 ? after reporting a six percent profit drop in the second quarter that was not as bad as Wall Street expected.

Credit card lender American Express climbed 4.28 percent to $31.69, benefiting from an analyst upgrade.

The bond market fell. The yield on the 10-year US Treasury rose to 3.526 percent from 3.491 percent on Monday while that on the 30-year bond climbed to 4.365 percent from 4.348 percent. Bond yields and prices move in opposite directions.