NEW YORK (AP) — The stock market jumped Tuesday following a surge in U.S. home prices and signs of strength in Europe's economy. Strong earnings reports also helped power the gains.

The Dow Jones industrial average gained 107 points to 13,986 as of 11:49 a.m. EST. The Standard & Poor's 500 gained 13 to 1,509. The Nasdaq composite was up 29 to 3,160.

The rise follows two days of whiplash. On Friday, the Dow gained 149 points, rising above 14,000 for the first time since 2007. On Monday, it fell 129 points, its worst sell-off of the year so far.

Tuesday's advance was driven by new data showing that U.S. home prices rose in December at the fastest pace in more than six years. CoreLogic, a real estate data provider, reported that home prices rose 8.3 percent. In Europe, a measure of manufacturing and service businesses rose to a 10-month high January.

Estee Lauder rose $3.29 to $64.33 after reporting earnings that beat analysts' expectations. Profits surged 13 percent at the beauty products company as sales in the U.S. and emerging markets rose. Archer Daniel Midland, a company that makes food ingredients and animal feed, gained $1.07 to $29.51 after its earnings jumped in the last quarter following a restructuring.

Stocks got the year off to a strong start. The Dow advanced 5.8 percent in January, its best start to the year since 1994, according to data compiled to S&P Dow Jones indices. The S&P 500 rose 5 percent.

Lance Roberts, chief economist at Streettalk Advisors in Houston, Texas, said that's related more to the Federal Reserve's commitment to keep money cheap than to companies' performance. If earnings are beating estimates, he said, it's largely because expectations were so low.

"If you lower the hurdles enough, companies can get over them," Roberts said.

The fact that small, individual investors are starting to return to stocks, as they have in recent weeks, is another sign that the market is due for a correction, Roberts and other analysts have said.

McGraw-Hill Cos., parent of the Standard & Poor's ratings agency, fell $3.30 to $46.93, after the federal government sued S&P. The government said that S&P knowingly misled investors about the quality of the mortgage-backed securities it was rating in the run up to the financial crisis that caused the Great Recession.

Today's decline follows a 14 percent drop for the stock on Monday, after reports about the lawsuit first leaked.

The yield on the 10-year Treasury note, which moves inversely to its price, climbed six basis points to 2.02 percent.

Other stocks making big moves;

— Cereal maker Kellogg jumped $1.10 to $59.21, after reporting fourth-quarter results. It reported a fourth-quarter loss on a pension-related charge, but its underlying earnings rose, helped partly by its recent purchase of Pringles chips.

— Dell, the struggling computer giant, rose 12 cents to $13.39 after the company announced a $24.4 billion buyout deal led by founder Michael Dell that will take the company private at $13.65 a share.

— Yum Brands, parent of KFC, Pizza Hut and Taco Bell, fell $1.78 to $62.16 after the company warned late Monday that 2013 profits could decline as it continues to reel from a controversy over its chicken suppliers in China.