- U.S. stocks rose after new home sales and durable goods orders topped economists' forecasts, spurring speculation the economy can weather losses in credit markets.
Homebuilders Toll Brothers Inc., Centex Corp. and Standard Pacific Corp. led shares higher. Gap Inc., the biggest U.S. clothing retailer, gained on earnings that topped analysts' estimates. Energy, raw material, telephone and computer stocks climbed for the fourth time this week.
The Standard & Poor's 500 Index increased 3.74, or 0.3 percent, to 1,466.24 as of 11:55 a.m. in New York. The Dow Jones Industrial Average added 38.78, or 0.3 percent, to 13,274.66. The Nasdaq Composite Index gained 7.5, or 0.3 percent, to 2,549.2.
The S&P 500 has risen 1.4 percent and the Dow average has gained 1.5 percent this week. Most stocks advanced five out of the last six days after the Federal Reserve cut the discount rate it charges banks by half a percentage point to 5.25 percent on Aug. 17. Stocks also climbed this week on takeover speculation and earnings that exceeded analysts' estimates.
The gains in new home sales and demand for products meant to last several years came before credit costs rose in August. Still, the data eased concern that the worst housing slump in 16 years could send the nation into a recession.
``We don't see a recession in the cards,'' said Hayes Miller, who helps manage $38 billion as portfolio manager of global equities at Baring Asset Management Inc. in Boston. ``There's still going to be enough corporate spending, there's still going to be enough investment, there's still going to be enough government spending.''
Global Advance
European stocks climbed, heading for the biggest weekly advance since June. Asian stocks fell for the first time in five days after Bank of China Ltd. said it had almost $9.7 billion invested in U.S. subprime loans.
Toll Brothers, the largest U.S. luxury home builder, added 28 cents to $22.93. Centex, the fourth biggest, gained 44 cents to $32.30. Standard Pacific climbed 13 cents to $9.80.
Gap Inc. increased 91 cents to $18.31. The retailer said profit rose for the first time in eight quarters after it eliminated jobs and reduced inventory. Gap also increased its full-year profit forecast and said it plans to buy back an additional $1.5 billion of its own shares.
Earnings Growth
Second-quarter earnings from companies in the S&P 500 gained 10.7 percent through Aug. 22, more than double the estimate of analysts surveyed by Bloomberg when the reporting season began last month.
Energy companies gained 1.2 percent as a group, the most among 24 industries in the S&P 500, as crude oil rose above $71 a barrel. Exxon Mobil Corp., the biggest U.S. oil company, added $1.14 to $84.39. Chevron Corp., the second-largest U.S. oil company, added $1.21 to $86.69.
Whole Foods Market Inc. gained 94 cents to $44.28. The largest U.S. natural-foods grocer may proceed with its $565 million takeover of rival Wild Oats Markets Inc. after an appeals court rejected U.S. regulators' attempt to block the transaction.
Durable goods orders advanced 5.9 percent last month, the Commerce Department said. Economists in a Bloomberg survey had expected a gain of 1 percent. Excluding orders for transportation equipment such as airplanes, durable-goods orders rose 3.7 percent, topping economists' forecast of 0.6 percent.
In a separate report, the Commerce Department said purchases of new homes increased 2.8 percent to an annual pace of 870,000, exceeding the highest estimate in a Bloomberg survey of economists.
`A Real Shocker'
``Everybody was looking for a disaster with these numbers,'' said Jack Bouroudjian, chief investment strategist at Chicago- based Brewer Investment Group, which oversees about $300 million, including options and futures. ``Durable goods was a surprise this morning, and now new homes sales is a real shocker.''
Nucor Corp. added $1.95, or 3.8 percent, to $53.48. Merrill Lynch & Co. analyst David A. Lipschitz recommended investors buy shares of the second-largest U.S.-based steel company because metal prices may climb on rising demand.
Countrywide Financial Corp., the nation's largest mortgage lender, fell 86 cents, or 3.9 percent, to $21.16, the steepest decline in the S&P 500. The sale of $2 billion of preferred stock to Bank of America Corp., while erasing concern Countrywide will go bankrupt, ``comes at a steep cost to common shareholders,'' Credit Suisse analysts wrote in a note to clients.
Stocks fell for the first time in six days yesterday after Countrywide Chief Executive Angelo Mozilo told CNBC that the housing slump may send the nation into a recession.
Marvell Technology fell $2.10 to $15.75 after the maker of chips used in Apple Inc.'s iPod music player said it earned 6 cents a share, excluding some items, in the second quarter. That was 1 cent short of the average estimate from analysts in a Bloomberg survey.
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