* Durable goods orders, home sales rebound in February
* IBM down after news of layoffs drags
* Poor bond auction briefly hits sentiment
* Dow up 1.2 pct; S&P 500 up 1 pct, Nasdaq up 0.8 pct
* For up-to-the-minute market news, click []
(Updates with Dow performance, volume data)
By Edward Krudy
NEW YORK, March 25 (Reuters) - U.S. stocks rose in a late
rally on Wednesday as unexpectedly strong housing and durable
goods data fueled hopes the economy is finally on the mend,
offsetting concerns the United States may struggle to fund
plans to pull the economy out of recession.
Trading was volatile as poor demand in a U.S. Treasury
auction poured cold water on an early rally sparked by the
reassuring economic data. But by the end of the session much of
that disappointment had worn off, traders said, as investors
bet the economy was improving and stocks would continue rising
from recent 12-year lows.
Homebuilder shares <.DJUSHB> rose 2.2 percent after new
home sales rose at their fastest pace in 10 months in February,
adding to recent data showing signs of hope in the battered
housing sector. Consumer stocks also rose, with McDonald's Corp
<MCD.N> gaining 2.9 percent.
Big manufacturers like Boeing Co <BA.N> advanced after U.S.
orders for long-lasting manufactured goods unexpectedly
rebounded in the same month. For story on the data see
[]
"A lot of people want to think we've seen the bottom of the
economic cycle," said Cleveland Rueckert, market analyst at
Birinyi Associates Inc in Stamford, Connecticut, "but they are
still skittish," he added in reference to the day's
volatility.
The Dow Jones industrial average <> gained 89.84
points, or 1.17 percent, to 7,749.81. The Standard & Poor's 500
Index <.SPX> rose 7.76 points, or 0.96 percent, to 813.88. The
Nasdaq Composite Index <> added 12.43 points, or 0.82
percent, to 1,528.95.
The Dow is up 18.37 percent from the 12-year closing low
hit on March 9. Twenty of the 30 stocks that make up the blue
chip index rose while 10 fell on Wednesday.
Sentiment that the banking system is stabilizing was
reinforced after Bank of America Corp <BAC.N> Chief Executive
Kenneth Lewis, in an interview with the Los Angeles Times, said
the bank wants to start repaying $45 billion of federal bailout
money next month.
Shares of Bank of America Corp <BAC.N> rose 7.7 percent to
$7.70 while JPMorgan Chase & Co <JPM.N> surged 8.9 percent to
$28.56.
Midway through the session, weak demand for $34 billion of
U.S. Treasury notes briefly snuffed out the earlier rally,
reviving fears about demand for sovereign debt after Britain
failed to get enough demand for its debt, the first failed
auction for UK debt since 2002. For details see []
and []
It is estimated the Treasury will sell about $2 trillion of
debt this year, or about one-third of outstanding Treasury debt
through the end of 2008. The cash is needed to heal the ailing
banking industry and keep the auto industry from collapsing.
International Business Machines <IBM.N> fell after news
that it is planning to lay off workers in its services unit,
considered a strength area for the company. The stock shed 0.4
percent to $97.95.
Shares of homebuilders Toll Brothers <TOL.N> rose 3.2
percent to $19.14 and DR Horton <DHI.N> added 5.8 percent to
$10.06, but both were off session highs.
Trading was active on the New York Stock Exchange, with
about 1.77 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq, about
2.49 billion shares traded, above last year's daily average of
2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
2137 to 923 while advancers beat decliners on the Nasdaq by
about 1692 to 979.
(Editing by Leslie Adler)
