* Fears of double-dip recession ease
* Investors welcome rebound in business spending
* Dow up 1.9 pct, S&P up 2.1 pct, Nasdaq up 2.1 pct
* For up-to-the-minute market news see []
(Updates to late afternoon, changes byline)
By Ryan Vlastelica
NEW YORK, Sept 24 (Reuters) - U.S. stocks climbed in a
broad advance on Friday, on track for four consecutive weeks of
gains as traders revived an atypical September rally after
three days of losses.
Economic data gave a mixed picture on Friday, but traders
latched on to a rise in August business spending as the latest
sign the recovery is on firmer ground. That seemed to trump a
lackluster read on new home sales in August. For details, see
[]
"Last month investors were positioned for what we thought
would be a double-dip recession and massive inflation, but
since it ended up being not nearly so bad, we've swung the
other way," said Lawrence Glazer, managing partner at Mayflower
Advisors in Boston.
Buying was broad across sectors, with about five stocks
rising for each one that fell on both the New York Stock
Exchange and Nasdaq. For September, the S&P 500 is up 9.4
percent.
Volume was on course for another moderate day and indexes
were up about 2 percent. Around 5.6 billion shares traded on
the NYSE, Amex and Nasdaq by early afternoon.
"The volume suggests there's not broad retail
participation, and to have conviction in the rally you'd like
to see that," Glazer said.
The Dow Jones industrial average <> was up 197.04
points, or 1.85 percent, at 10,859.46. The Standard & Poor's
500 Index <.SPX> was up 23.42 points, or 2.08 percent, at
1,148.25. The Nasdaq Composite Index <> was up 49.89
points, or 2.14 percent, at 2,376.97.
Traders noted that a short bias going into the open this
morning had been chased out when the market held its gains
after the uninspiring housing data. That pushed prices up as
traders covered short positions.
The broad-based index crossed a major resistance level at
1,130 on Monday, but its close below that mark in the last
session and light trading volumes have caused some investors to
question the move's sustainability.
Other technical indicators are pointing to an overbought
condition in the S&P 500, although the declines of the last
three days have eased that somewhat.
Analysts say that long-term buyers are not fully
participating in the rally, making the market more susceptible
to a reversal in direction.
"The volume isn't indicative of people piling in, there's
no mad rush to buy," said Joseph Greco, a managing director at
Meridian Equity Partners in New York. "We're coming into the
end of the quarter and no one wants to get caught short."
Even so, the S&P 500 also retook its 61.8 percent
retracement of its April-to-July fall at 1,140, which can be an
important level for traders.
Shares of builder KB Home <KBH.N> rose 3.3 percent to
$12.10 after it posted a smaller-than-expected third-quarter
loss. The news offset the weak housing data, and the Dow Jones
home construction index <.DJUSHB> rose 2.9 percent.
[]
Nike Corp <NKE.N> rose 3.4 percent to $80.30 a day after
the company reported stronger-than-expected orders and profit.
[]
All 30 components of the Dow industrials rose, along with
Advanced Micro Devices Inc <AMD.N> even though the chipmaker
forecast a decline in revenue. []
Boosting investor sentiment was the share offering of
Brazilian state oil company, Petrobras. The sale of nearly $70
billion in shares surpassed expectations, erasing concerns that
stocks were less attractive assets. []
(Editing by Kenneth Barry)
