NEW YORK (AP) – Stocks rose sharply on signs of an improving housing market Tuesday, with falling oil prices contributing to the rally. The Dow Jones industrials gained more than 100 points.

The National Association of Realtors’ index for pending sales of existing homes increased at a seasonally adjusted annual rate of 0.7 percent to 109.3 in February from a reading of 108.5 in January. The index was 8.5 percent below its level of a year earlier, but stronger than the market had been expecting.

The data reassured the market that the housing sector, while weak, is not being pummeled by the struggling subprime mortgage sector. Fears that mortgage problems will spill over into the rest of the economy have been a big factor behind the market’s volatility of the past several weeks.

Wall Street was also relieved that crude oil prices declined as tensions between Britain and Iran eased. High energy prices contribute to inflation, which are an obstacle to lower interest rates.

Investors awaited reports on sales from the nation’s automakers, which they are hoping will not signal an abrupt halt in consumer spending.

In midmorning trading, the Dow rose 100.13, or 0.81 percent, to 12,482.43.

Broader stock indicators also surged. The Standard & Poor’s 500 index was up 9.93, or 0.70 percent, at 1,434.48, and the Nasdaq composite index added 21.96, or 0.91 percent, to 2,444.22.

Bonds were little changed after the home sales data, with the yield on the benchmark 10-year Treasury note at 4.65 percent, the same as late Monday. The dollar rose against other major currencies, while gold prices fell.

A barrel of light sweet crude dropped more than a dollar to $64.35 on the New York Mercantile Exchange. Prices had surged when 15 British sailors and marines were detained March 23 by Iran, but the two nations are in negotiations that appeared to be bringing the sailors closer to release.

Homebuilders rose after the slight uptick in February pending home sales. Pulte Homes rose 33 cents to $26.66; KB Home rose 60 cents to $42.52; and Toll Brothers Inc. rose 22 cents to $27.40.

Home lenders also got a boost, after many of them fell a day earlier when New Century Financial Corp. filed for bankruptcy protection, the biggest mortgage lender to collapse.

Fremont General Corp. rose 20 cents to $6.72.

Accredited Home Lenders, a mortgage bank, said it opened a $500 million credit line with a large commercial bank and renewed a $600 million borrowing arrangement with an investment bank. The stock rose $1.81, or 21 percent, to $10.29.

Ford Motor Co., General Motors Corp., DaimlerChrysler AG and others are preparing to release March sales figures on Tuesday. GM, the nation’s largest automaker, on Tuesday said its sales in China jumped 25 percent in the first quarter. With U.S. sales sluggish, looking overseas is seen as a key driver to sales. GM became China’s biggest automaker in 2005 when it overtook Germany’s Volkswagen AG.

Ahead of the auto sales data, GM rose 26 cents to $31.09; Ford rose 5 cents to $8.14; and Daimler Chrysler fell $1.19 to $82.83.

The Russell 2000 index of smaller companies was up 6.82, or 0.85 percent, at 810.04.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 266.5 million shares.

Overseas, Japan’s Nikkei stock average rose 1.27 percent. In afternoon trading, Britain’s FTSE 100 was up 0.51 percent, Germany’s DAX index was up 1.21 percent, and France’s CAC-40 was up 0.86 percent.

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