US STOCKS-Wall Street gains as Fed says economy stabilizing

                                
 * Toll Brothers, home builders jump; Applied Materials up
                                
 * Macy's rises on better-than-expected results
                                
 * Dow up 1.3 pct; S&P 500 up 1.2 pct; Nasdaq up 1.5 pct
 (Updates to add volume on NYSE, Nasdaq)
                                
 By Rodrigo Campos
                                
 NEW YORK, Aug 12 (Reuters) - U.S. stocks powered higher on
Wednesday as the Federal Reserve said it saw signs of a more
stable economy.
                                
 Stocks had been on track to close at their highest level in
10 months, led by technology and financials, but shares lost
steam in the last half hour of trading.
                                
 The Federal Reserve said the economy was leveling out, and
it left interest rates unchanged at the end of its two-day
policy meeting.
                                
 The Fed also said it will extend the duration but not the
size of a program to buy long-term government debt, which is
part of its effort to revive credit and stimulate the economy.
For details see [ID:nN1272730].
                                
 "The Fed admitted the economy is getting better, but not so
much better we're going to be terminating all of our programs,
which is what everybody was afraid of," said Doug Roberts,
chief investment strategist at ChannelCapitalResearch.com in
Shrewsbury, New Jersey.
                                
 Financials <.GSPF> was the top-performing sector on the S&P
500, up 2 percent, after a 3.5 percent slide on Tuesday.
Allstate Corp <ALL.N> rose 6.3 percent to $28.42 after Bank of
America-Merrill Lynch upgraded the insurer to "buy" from
"neutral." [ID:nBNG164323].
                                
 The Dow Jones industrial average <.DJI> gained 120.16
points, or 1.30 percent, to close at 9,361.61. The Standard &
Poor's 500 Index <.SPX> rose 11.46 points, or 1.15 percent, to
1,005.81. The Nasdaq Composite Index <.IXIC> added 28.99
points, or 1.47 percent, to 1,998.72.
                                
 The S&P is up 48.7 percent from its more than 12-year
closing low set on March 9.
                                
 Shares of Applied Materials rose 3.3 percent to $13.66
after the maker of chip equipment said it would at least break
even this year thanks to new orders and deep cost cuts. The
PHLX semiconductor index <.SOXX> gained 1.8 percent.
                                
 Shares of luxury home builder Toll Brothers <TOL.N> soared
14.4 percent to $23.42 after it said its net signed contracts
rose in the third quarter, the first increase in four years.
The Dow Jones home construction index <.DJUSHB> jumped 5
percent.
                                
 Shares of Macy's Inc <M.N> rose 6 percent to $16.40 after
the department store operator posted better-than-expected
earnings and raising its outlook.
                                
 Volume was low on the New York Stock Exchange, with 1.23
billion shares changing hands, below last year's estimated
daily average of 1.49 billion. On the Nasdaq about 2.18 billion
shares traded, below last year's daily average of 2.28
billion.
                                
 Advancing stocks outnumbered decliners on the NYSE by a
ratio of about 11 to 4, while on the Nasdaq, about 12 stocks
rose for every five that fell.
 (Additional reporting by Leah Schnurr; Editing by Leslie
Adler)