Housing market's freeze deepens

Investors may have been encouraged to buy back into stocks due to a rise in the dollar, whose decline over the last several months has contributed to worries about inflation and a possible drop in foreign interest in U.S. investments.

Peter Cardillo, chief market economist at Avalon Partners, said the dollar's advance came after European Central Bank chief Jean-Claude Trichet said the United States and Europe remained economically intertwined.

The comment suggested to investors that strength in other countries could help stabilize the U.S. during its rough patch.

Fears of a global economic slowdown have been weighing on stocks around the world.

As expected Thursday, the Bank of England lowered its key interest rate by a quarter-point, its second cut in three months, while the European Central Bank left its key rate unchanged at 4%. read more