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Finance stocks pace a market rebound

Banks and other financial companies led U.S. stock indexes sharply higher Tuesday, snapping an eight-day losing streak for the Dow Jones industrial average.

Banks and other financial companies led U.S. stock indexes sharply higher Tuesday, snapping an eight-day losing streak for the Dow Jones industrial average.

The rally was broad, with materials and industrial companies among the biggest gainers. Energy stocks notched a big gain as crude oil prices moved higher.

The market got a boost from new data showing that consumer confidence in the U.S. hit its highest level since 2000.

Investor optimism that Congress and the White House are pivoting to tax cuts and other business-friendly policy proposals after spending recent weeks focused on health care also helped send the market higher, said JJ Kinahan, chief market strategist at TD Ameritrade.

"The consumer confidence number was really good, but more important, it seems like both sides of the aisle do want to get something done around tax reform," Kinahan said. "That's all the market is really hanging its hat on."

The Dow rose 150.52 points, or 0.7 percent, to 20,701.50. The 30-company average's decline in the previous eight consecutive days was its longest slide in more than five years. The Standard & Poor's 500 index added 16.98 points, or 0.7 percent, to 2,358.57. The Nasdaq composite index gained 34.77 points, or 0.6 percent, to 5,875.14.

Trading got off to a downbeat start Tuesday as investors weighed the latest batch of company earnings news. But the market livened up around midmorning when the Conference Board said its consumer confidence index rose this month to its highest level in more than 16 years. The index measures both consumers' assessment of current conditions and their expectations for the future. Both improved this month.

Several companies reported improved quarterly results or outlooks, which also helped put traders in a buying mood.

Darden Restaurants jumped 9.3 percent after the owner of Olive Garden reported strong quarterly results and said it will buy the Cheddar's Scratch Kitchen chain for $780 million. Cheddar has 165 locations in 28 states, including Pennsylvania and Delaware, according to its website. Darden was the biggest gainer in the S&P 500, rising $7.04 to $82.62.

Red Hat climbed 5.2 percent after the open-source software company reported strong sales and solid guidance for the current quarter. The stock added $4.28 to $86.48.

General Motors rose 2.4 percent after its board voted to reject a proposal from investor David Einhorn to split the automaker's stock into two classes. GM shares picked up 85 cents to $35.56.

The euro weakened to $1.0808 from $1.0868, while the dollar strengthened to 111.09 yen from 110.57 yen.

In metals trading, the price of gold slipped 10 cents to settle at $1,255.60 an ounce. Silver rose 14 cents to $18.25 per ounce. Copper added 4 cents to $2.68 per pound.