US stocks rallied on gains in tech stocks and after a jump in oil prices fueled the energy sector. Economic news also influenced investors. The Institute for Supply Management's August manufacturing index slipped to 52.9 from 53.8 in July.

The report also found inflationary pressures faced by businesses fell to 33 per cent from 38 in July, well below the 45 per cent that businesses reported paying in May. The report is one of the first economic readings for August and is being watched for signs that may influence a rate cut.

Also influencing the market was the news from the Commerce Department that construction spending dropped 0.4 per cent in July, compared to June. It was the weakest number since January and clearly illustrates that the housing slump is not over yet.

Taking a look at the markets; on Tuesday the Dow Jones Industrials gained 91 to 13,449; the S&P500 was up 15 ending at 1,489, and the Nasdaq was up 34 points to finished at 2,630.