Stocks climb, Dow rallies on hopes for interest rate cuts

The U.S. stock market climbed again Tuesday on hopes for a coming cut to interest rates.The Standard & Poor's 500 rose 0.9% after breaking out of a morning lull and is back within 1.8% of its all-time high. The Dow Jones industrial average rallied 664 points, or 1.4%, and the Nasdaq composite gained 0.7%.

- BY STAN CHOE

Stocks got a boost from easing yields in the bond market. Lower interest rates can cover up many sins in financial markets, including prices going too high, and hopes are strong that the Federal Reserve will cut its main interest rate at its next meeting to juice the economy further.

A raft of mixed economic data on Tuesday left traders betting on a nearly 83% probability that the Fed will cut in December, according to data from CME Group. That’s roughly the same as a day before and up sharply from the coin flip’s chance that they saw just a week ago.

One of Tuesday's reports said that shoppers bought less at U.S. retailers in September than economists expected. Another said confidence among U.S. consumers worsened by more in November than expected, a second signal that the economy could potentially use the help of lower interest rates.