MarketView for March 25

Stocks ended higher on Tuesday, rebounding from a two-day decline as the hard-hit biotechnology sector regained its momentum and a strong read on consumer confidence increased optimism about the economy.

Trading was choppy throughout the day with the Nasdaq at one point turning lower, led by a sharp reversal in biotech shares.

.So-called momentum stocks were still down for the day but off their lows, including Netflix (NFLX.O), down 2.1 percent at $370.84. Netflix has declined for 14 of the past 15 sessions, falling almost 19 percent over that stretch

Biotech shares also reversed earlier losses, including Regeneron Pharma (REGN.O), ending 0.8 percent higher at $308.87, and Gilead Sciences Inc (GILD.O), up 1.3 percent at $73.03. Alexion Pharma ended 2.2 percent higher at $153.08.

The rebound in some so-called "momentum" names was an indication that while concerns persist about geopolitical tensions in Ukraine and slowing growth in China, investors are not so bearish on equities as to sell them wholesale.

The CBOE Volatility Index .VIX, a gauge of investor anxiety, fell 7.1 percent to 14.02.

Consumer confidence rose more than expected in March, climbing to its highest level since January 2008. The report was the latest in a string of positive reads on the U.S. economy that supported theories that softness early this year was related to bad weather and not weakening fundamentals.

Supporting the rebound in momentum stocks on Tuesday, bullish bets were placed on those names in the options market. Facebook (FB.O) was the second-most actively traded equity option.

The largest open interest for Facebook options was seen in $70 calls that expire in April and May. The stock ended 1.2 percent higher at $64.89. Call options are generally viewed as bullish bets, expecting the stock to move higher.

Investors continued to watch global issues cautiously. On Monday, major stock indexes fell on concerns that the crisis in Ukraine could escalate, pushing traders to take profits in such high-flying sectors as biotech and Internet shares. Those names rebounded on Tuesday, with some of Monday's biggest decliners topping the list of advancing S&P 500 names.

In the latest on the housing market, U.S. single-family home prices rose slightly more than expected in January, according to the S&P/Case-Shiller composite index of 20 metropolitan areas, while new home sales fell more than expected in February.

Volume of about 6.6 billion shares traded on U.S. exchanges, slightly below the 6.9 billion average so far this month, according to data from BATS Global Markets.

Home Sales Fall

The Commerce Department reported Tuesday morning that sales of new single-family homes hit a five-month low in February as an unusually cold and snowy winter disrupted economic activity at the start of year. So it was not much of a surprise that new home sales fell 3.3 percent to a seasonally adjusted annual rate of 440,000 units, the lowest level since last September.

January's sales were revised down to a 455,000-unit pace from a 468,000-unit rate. The decline brought new home sales in line with other data such as home re-sales and building activity that have offered a downbeat picture of the housing market.

Some of the housing slowdown has been blamed on the harsh weather. At the same time the sector lost momentum last summer following a run-up in mortgage rates. A dwindling supply of homes for sale and soaring house prices have also weighed on housing. But a recovery is expected later this year as household formation accelerates after abruptly slowing in 2013. The lack of houses for sale is keeping prices supported.

Last month, new single-family home sales in the Northeast tumbled 32.4 percent, the biggest decline since October 2012, indicating severe weather continued to hurt activity. Sales fell 1.5 percent in the South, which experienced harsh weather. They surged 36.7 percent in the Midwest, but fell 15.9 percent in the West.

Though the supply of new houses on the market hit the highest level since December 2010, inventory remains low. At February's sales pace it would take 5.2 months to clear the supply of houses on the market. That was up from 5.0 months in January and the most since last September. A supply of 6.0 months is normally considered a healthy balance between supply and demand.

Home Prices Rise

 Single-family home prices rose in January and slightly beat expectations, a closely watched survey said on Tuesday. The S&P/Case-Shiller composite index of 20 metropolitan areas rose 0.8 percent in January on a seasonally adjusted basis.

An extremely cold winter has been blamed for a spate of soft data in the past few months, though the weather's effects on economic numbers are starting to abate. S&P/Case-Shiller said prices in the 20 cities rose 13.2 percent year over year, just shy of expectations for a 13.3 percent gain.

Consumer Confidence at 6-Year High

The Conference Board, an industry group, reported on Tuesday that consumer confidence rose in March to its highest level in more than six years as expectations brightened, according the report released on Tuesday.

The Conference Board reported that its index of consumer attitudes rose to 82.3, the highest since January 2008, from a upwardly revised 78.3 in February. February's figure was originally reported as 78.1.

"Overall, consumers expect the economy to continue improving and believe it may even pick up a little steam in the months ahead," said Lynn Franco, director of economic indicators at the Conference Board in a statement.

"While consumers were moderately more upbeat about future job prospects and the overall economy, they were less optimistic about income growth."

The expectations index rose to 83.5 from an upwardly revised 76.5, while the present situation index fell to 80.4 from a revised 81.0.

Consumers' labor market assessment was slightly more negative in March. The "jobs hard to get" index rose to 33.0 percent from a downwardly revised 32.4 percent in February, while the "jobs plentiful" index dipped to 13.1 percent from 13.4 percent.

Consumers anticipated larger price increases, with expectations for inflation in the coming 12 months up to 5.5 percent in March from 5.2 percent.

Plosser Says Yellen Not Wrong

Federal Reserve Chair Janet Yellen did not make a "mistake" when she said that there may be around six months between the time the U.S. central bank ends its bond buying and starts to raise interest rates, Philadelphia Federal Reserve Bank President Charles Plosser said on Tuesday.

That time frame was already expected in the markets, Plosser told CNBC. "It's better to get away from talking about time frames," he said. Still, he said, he was surprised the market reacted as much as it did. Stocks and bonds fell after her remark.

Plosser went on to say that the Fed will not contemplate raising rates before it ends the bond-buying program, which will be probably be in October or November if the Fed's current plan stays on course.