US STOCKS-Wall St hits 9-month highs on upbeat data

                                
  
                                
 * Contracts to buy used homes rise more than expected
                                
 * Pepsi to buy bottlers, shares rise
                                
 * Caterpillar shares jump, lead Dow industrials
                                
 * Dow up 0.4 pct, S&P 500 up 0.3 pct, Nasdaq up 0.1 pct
                                
 * For up-to-the-minute market news click [STXNEWS/US]
 (Recasts, changes byline)
                                
 By Rodrigo Campos
                                
 NEW YORK, Aug 4 (Reuters) - U.S. stocks edged higher on
Tuesday, led by the financial sector as economic data pointed
to a sustained if slow recovery from the recession, taking the
Dow and the S&P 500 to nine-month highs.
                                
 The Nasdaq achieved its highest close since early
October.
                                
 U.S. consumers spent more in June, though partly because
of rising gasoline prices, and contracts to buy used houses
rose more than expected. But income suffered its biggest drop
in four-and-a-half years, underscoring fears over growing
unemployment. For details see [ID:nN04453698]
                                
 The S&P financial index <.GSPF> rose 2.1 percent as the
housing data was a positive for the sector, while the Dow
Jones Home Construction index <.DJUSHB> gained 2.5 percent.
                                
 "The one thing that's driving this market more than
anything is the fear that as an investor, you're missing out
on something big," said Angel Mata, managing director of
listed equity trading at Stifel Nicolaus Capital Markets in
Baltimore.
                                
 "There's so much power to this rally that a little move
down is a correction," and invites more investors in, he
said.
                                
 The Dow Jones industrial average <.DJI> gained 33.63
points, or 0.36 percent, to close at 9,320.19. The Standard &
Poor's 500 Index <.SPX> rose 3.02 points, or 0.30 percent, to
1,005.65. The Nasdaq Composite Index <.IXIC> edged up 2.70
points, or 0.13 percent, to end at 2,011.31.
                                
 Shares of Dow component Caterpillar <CAT.N>, a heavy
equipment maker, jumped 6.1 percent to $47.89 after the
company's CEO gave an upbeat earnings presentation and said
that in future recessions, the company would be able to report
annual earnings well above this year's forecast.
[ID:nN04133572]
                                
 PepsiCo Inc <PEP.N> shares rose 5.1 percent to $59.06
after it said it agreed to buy Pepsi Bottling Group Inc
<PBG.N> and PepsiAmericas Inc <PAS.N> in a deal worth $7.8
billion, as the second-largest soft drink maker behind
Coca-Cola Co <KO.N> seeks to cut costs and boost profits in
North America. [ID:nN041054]
                                
 Shares of Pepsi Bottling gained 8.5 percent to $36.49 and
PepsiAmericas jumped 9 percent to $28.50.
                                
 Two of the largest U.S. mall owners, Simon Property Group
Inc <SPG.N> and Macerich Co <MAC.N>, posted lower results as
consumers remain reluctant to spend, but the companies' CEOs
said retail declines appear to be abating and shares jumped.
                                
 Simon Property, up 6.9 percent at $60.91, was the top
point gainer in the Dow Jones Equity REIT index <.DJR>, which
jumped 5.3 percent.
                                
 The current earnings season fueled the second leg of a
stocks rally that started in March, but stalled in June; the
advance has taken the broad S&P 500 index up 48.6 percent from
its 12-year closing low hit on March 9.
 (Reporting by Rodrigo Campos; Editing by Jan Paschal)