Economy lifts Wall Street drives S&P 500 near record

By Angela Moon

NEW YORK (Reuters) - Stocks rose on Tuesday, driving the S&P 500 within striking distance of its all-time high, as strong data on home prices and manufacturing fed optimism about the economy, although the improvements were seen as slow.

Data showed U.S. single-family home prices rose in January at the fastest pace in more than six years while long-lasting U.S. manufactured goods, also known as durable goods orders, shot up in February.

"I think the batch of data was enough to convince investors that the U.S. economy is on the right track," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, in New York.

"At this point, it's hard to argue that anything will derail the U.S. economy, and that is boosting investors' confidence as they continue to load up on equities."

Still, investors may look for reasons to take profits, with the S&P 500 up 9.4 percent so far this year. The rally has lifted the benchmark index near its all-time closing high, which it nearly reached on Monday.

The Dow Jones industrial average <.dji> was up 91.37 points, or 0.63 percent, at 14,539.12. The Standard & Poor's 500 Index <.spx> was up 9.16 points, or 0.59 percent, at 1,560.85. The Nasdaq Composite Index <.ixic> was up 9.91 points, or 0.31 percent, at 3,245.20.

The benchmark S&P 500 index traded on Monday just a quarter point below its all-time closing high, then retreated as investors cashed in gains in the wake of news out of Europe. Its record close stands at 1,565.15, set October 9, 2007.

In a sign that growth continues to be slow, sales of new U.S. single-family homes fell more than expected in February, and the latest reading on consumer confidence was weaker than expected.

Shares of homebuilding stocks were mixed. Lennar Corp stock edged up 0.4 percent to $41.71, but Hovnanian Enterprises shares slid 3 percent at $5.88.

Investors remained concerned about the negative implications of a financial rescue plan for Cyprus. They worried it would serve as a template for other euro-zone economies requiring bailouts.

Banks in Cyprus will remain closed until Thursday and will then be subject to capital controls to prevent a run on deposits. President Nicos Anastasiades said late on Monday that a 10-billion-euro ($13 billion) rescue plan approved over the weekend was "painful" but essential to avoid economic meltdown.

"If there's a run on deposits, there may be a selloff (in U.S. stocks), but that could pose an excellent entry point to get into the market and take advantage of this rally," said Todd Schoenberger, managing partner at LandColt Capital in New York.

In U.S. corporate news, Monsanto Co and DuPont Co settled a legal battle over rights to technology for genetically modified seeds. The companies agreed to drop antitrust and patent lawsuits against each other in U.S. federal court. Monsanto shares rose 4.3 percent to $103.72. DuPont, a Dow component, shed 0.5 percent to $48.87.

Netflix Inc was the S&P 500's top percentage gainer, jumping 5.6 percent to $191.03 after Pacific Crest raised its price target on the stock to $225 from $160, citing prospects for international subscriber growth.

Michael Dell's $24.4 billion buyout bid for Dell Inc could be derailed after billionaire Carl Icahn opened the door to an alliance with Blackstone Group LP to take control of the computer maker from its founder. Dell rose 0.3 percent to $14.56.

(Editing by Jan Paschal)

Source: http://news.yahoo.com/stock-index-futures-signal-higher-wall-st-open-083212656--finance.html

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