New home sales surged 18% in August to send the markets soaring to a sharply higher close with the Dow leaping 154 points to 17,210. Nasdaq jumped 46 points to 4,555.

On the upside

Shares of Citizens Financial Group (NYSE: CFG) climbed on its first trading day despite being priced below the expected range.

Bargain hunters lifted shares of SunEdison (NYSE: SUNE).

Rumors circulated that Alibaba (NYSE: BABA) may buy Yahoo (Nasdaq: YHOO).

On the downside

Profit taking continued to sink shares of ChinaNet Online Holdings (Nasdaq: CNET).

Concerns about an oversupply of coal continued to weigh down shares of Walter Energy (NYSE: WLT) and Alpha Natural Resources (NYSE: ANR).

Bloomberg reported that sales for Skechers (NYSE: SKX) have been dropping.

In the broad market, advancing issues outpaced decliners by a margin of more than 7 to 5 on the NYSE and by 2 to 1 on Nasdaq. The broader S&P 500 climbed 15 points to 1998. Bitcoin eased a fraction to $417.