* Investors welcome rebound in business spending
* Trading volume remains below average
* Nike, KB Home advance after strong quarterly reports
* Dow up 1.9 pct, S&P up 2.1 pct, Nasdaq up 2.3 pct
* For up-to-the-minute market news see []
(Updates with Bernanke speech in final paragraph)
By Ryan Vlastelica
NEW YORK, Sept 24 (Reuters) - U.S. stocks notched their
fourth week of gains on Friday as investors used a rise in
business spending to revive the September rally after three
days of losses.
Economic data gave a mixed picture, 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
report 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 the New York Stock Exchange,
and four stocks rising for each one that fell on the Nasdaq.
For September, which is historically a weak month, the S&P
500 is up 9.5 percent. Investors said the need for money
managers to boost quarter-end performance bolstered buying.
Continuing a recent trend, volume was very light, with only
7.55 billion shares traded on the NYSE, Amex and Nasdaq, far
under the previous year's daily average of 9.65 billion
shares.
"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 government reported non-defense capital goods orders,
which are closely watched as a proxy for business spending,
surged more than 4 percent in August, a rate twice what had
been expected.
The Dow Jones industrial average <> was up 197.84
points, or 1.86 percent, at 10,860.26. The Standard & Poor's
500 Index <.SPX> finished up 23.82 points, or 2.12 percent, at
1,148.65. The Nasdaq Composite Index <> was up 54.14
points, or 2.33 percent, at 2,381.22.
For the week, the Dow was up 2.4 percent, the S&P rose 2.1
percent and the Nasdaq added 2.8 percent.
Traders noted that a short bias going into the open this
morning had been chased out when the market held its gains
after the flat housing data. That pushed prices up as traders
covered short positions.
The broad-based S&P 500 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.
"I think what you have here is month-end and quarter-end
pressure developing with huge asset-allocation trades," said
Tom Sowanick, chief investment officer of the Princeton, New
Jersey-based OmniVest.
Shares of builder KB Home <KBH.N> rose 3.4 percent to
$12.11 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 2.4 percent to $79.57 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. U.S.-listed shares rose 2.9
percent to $16.13. []
After the market closed, Federal Reserve Chairman Ben
Bernanke spoke at Princeton University but did not discuss the
outlook for the economy or monetary policy. [].
(Editing by Kenneth Barry)
