The stock market is picking up where it left off before its scare over debt problems in Dubai.

Major stock indicators rose more than 1 percent Tuesday, including the Dow Jones industrial average, which added 126 points and traded above 10,500 for the first time since October of last year.

A weaker dollar again boosted stocks, a pattern that has played out for months. The cheaper U.S. currency drove up commodities prices and lifted the shares of energy and materials companies that produce them.

Analysts said a mostly upbeat array of economic reports and easing worries about the fallout from debt struggles in Dubai gave investors who jumped out of the market last week reason to return.

The market's two-day advance leaves the Dow just above where it was before stocks tumbled Friday on worries that an investment fund in Dubai wouldn't be able to pay its debts. Investors worried that could trigger another financial spiral like the one that followed the collapse of Lehman Brothers last year.

Economic reports were mixed, but still pointed to a strengthening trend. The Institute for Supply Management, a trade group, said overall manufacturing activity grew at a slower pace in November but that new orders rose. That signals activity could pick up in the coming months. The ISM's measure of employment grew for the second straight month after sliding for more than a year.

The snapshot of U.S. factories followed a report from a Chinese industry group that said manufacturing activity grew in November for the ninth consecutive month.

Meanwhile, the National Association of Realtors said its reading on pending home sales rose in October to the strongest level since March 2006. Economists had expected pending sales to fall.

The Commerce Department said construction spending edged higher in October, the first increase in six months.

Bob Froehlich, senior managing director at Hartford Financial Services, said the day's news addressed some of investors' biggest worries: employment, housing and China's economy.

"What we're seeing is that we've got two of those three fixed," he said. "There are signs everywhere you look that the worst is behind us."

Froehlich expects that the nation's unemployment rate, already above 10 percent, will worsen before it begins to improve. Traders are looking to the Labor Department's November employment report, which is due Friday.

The Dow rose 126.74, or 1.2 percent, to 10,471.58, its highest close since October last year. It rose as high as 10,501.28 during trading, the first time it's topped the psychological barrier of 10,500 in 14 months.