U.S. Stocks Rise on Durable Goods, Home Sales, Confidence Data

By Elizabeth Stanton

July 25 (Bloomberg) -- U.S. stocks gained on growing speculation the economy will avert a recession after better-than- forecast reports on durable goods orders, consumer confidence and new home sales.

Freeport-McMoRan Copper & Gold Inc. led commodity producers higher after the Commerce Department reported a 0.8 percent increase in bookings for goods meant to last several years. All 15 homebuilders in Standard & Poor's indexes advanced on a report showing that home purchases decreased at a third the forecast rate. Juniper Networks Inc. rallied to a six-week high after the computer-networking equipment maker raised its forecasts.

The Standard & Poor's 500 Index rose 7.81 to 1,260.35 at 10:20 a.m. in New York. The Dow Jones Industrial Average climbed 73.2, or 0.6 percent, to 11,422.48. The Nasdaq Composite Index added 21.47, or 0.9 percent, to 2,301.58. Five stocks advanced for every two that fell on the New York Stock Exchange.

The S&P 500 erased a weekly drop a day after the biggest retreat in bank shares since 2000 sent the index to a 2.3 percent drop. The S&P 500 is little changed this week and the Dow average has declined 0.7 percent. The Nasdaq Composite Index is up 0.8 percent.

Freeport-McMoRan, the largest publicly traded copper producer, climbed 1.6 percent to $96.06 and led a 0.8 percent advance in the S&P 500 Materials Index as the durable-goods report boosted copper prices.

Economists in a Bloomberg survey had forecast a 0.3 percent drop in durable goods orders in June. The Commerce Department also revised its data on durable goods orders for May to reflect an increase of 0.1 percent, up from an unchanged reading.

Homebuilders Rally

Pulte Homes Inc. rallied 10 percent to $12.17, leading homebuilders to a 5.9 percent rally as a group.

New-home sales in the U.S. in June decreased 0.6 percent to a 530,000 pace, from an upwardly revised 533,000 in May, the Commerce Department said. Economists had forecast a 1.8 percent slide. The number of properties on the market dropped by the most in four decades, indicating builders are making some headway in clearing out inventories.

Retailers rose 1.4 percent as a group, led by a 3.4 percent gain in Macy's Inc., after the unexpected gain in consumer confidence. The Reuters/University of Michigan final index of consumer sentiment increased to 61.2 in July from 56.4 in June. The measure averaged 85.6 in 2007 and is up from a preliminary reading of 56.6 in early July. Economists had forecast a reading of 56.4 in July.

Juniper Climbs

Juniper Networks climbed $2.29, or 10 percent, to $24.86. The second-largest maker of networking equipment reported a 40 percent jump in profit. Third-quarter revenue will be $925 million to $935 million, Chief Executive Officer Scott Kriens said on a conference call. Analysts on average projected $887.1 million. Profit, excluding stock-based compensation costs, will be 29 cents to 30 cents share. Analysts predicted 29 cents.

Cisco Systems Inc., the largest maker of networking equipment, rose 2.7 percent to $22.35.

Delta added 7.2 percent to $7.29. Merrill, which upgraded the shares to ``buy'' from ``neutral,'' also said the stock is attractive because the airline has less debt than competitors.

Foreclosures Rise

Stocks rallied even after U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.

One in every 171 U.S. homeowners lost their house to foreclosure, received a default notice or was warned of a pending auction, an increase of 121 percent from a year earlier and a 14 percent rise from the first quarter, RealtyTrac Inc. said today.

All of the 23 developed nations in the MSCI World Index except for Canada experienced bear-market plunges of 20 percent or more since September as credit losses surged and record commodity prices stoked inflation. Brazil became the 23rd out of 25 developing countries in the MSCI Emerging Markets Index to enter a bear market yesterday. Only Jordan and Morocco avoided such slumps.