NEW YORK — Stocks rose Wednesday, extending the biggest rally for the Standard & Poor's 500 Index in a week, after reports on durable-goods orders and home prices beat economists' forecasts an d banks advanced.
The S&P 500 rose 1.3 percent to 1,177.60. The durable-goods data wiped out a 1.4 percent retreat in futures on the index. The Dow Jones Industrial Average added 143.95 points, 1.3 percent, to 11,320.71.
"Any time you see life in the walking dead, it certainly makes you feel a lot better," Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview.
With traders awaiting a speech Friday by Federal Reserve Chairman Ben Bernanke in Jackson Hole, Wyo., trading is being affected more than usual by levels monitored by so-called technical analysts who base forecasts on price and volume history.
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Equities rose after the reports on goods meant to last at least three years and housing prices contrasted with data this month on jobless claims, consumer confidence and manufacturing that s purred concern the U.S. is poised for a recession.
During last year's conference in Jackson Hole, Bernanke signaled a second round of asset purchases, known as QE2, that buoyed asset markets. The S&P 500 rose 28 percent between Aug. 26, 2010 , and Feb. 18 after he foreshadowed the $600 billion Treasury program.
Gold declined 5.6 percent to $1,757.30 an ounce Wednesday on speculation financial markets may be stabilizing, eroding the appeal of the precious metal as a haven. The futures climbed to a record high of $1,917.90 Tuesday.
Newmont, the largest U.S. gold producer, fell 1.6 percent to $60.26.
The KBW Bank Index of 24 stocks added 3.3 percent. Bank of America jumped 11 percent to $6.99 after plunging 53 percent this year through Tuesday. Financial stocks in the S&P 500 rose 2.8 percent, the biggest gain within 10 industries.
Richard Bove, an analyst who said last month that clients should stop buying financial stocks, recommended investors resume purchases after shares of U.S. banks tumbled.
Bank of America, JPMorgan Chase and Citigroup are among lenders that investors should buy because "they have fallen too much," Bove, a Lutz, Fla.-based analyst with Rochdale Securities, said in a research note. In a note to clients last month, Bove said clients should stop buying banks "since all stocks are likely to fall."
JPMorgan gained 3 percent to $35.83, while Citigroup added 4.1 percent to $28.45.
A gauge of 12 homebuilders in S&P indexes added 3.6 percent. D.R. Horton paced gains in homebuilders, rising 5.7 percent to $9.45, following the report showing an increase in home prices. To ll Brothers, the largest U.S. luxury-home builder, jumped 4.6 percent to $15.42 after reporting earnings that beat analysts' forecasts after a tax benefit and demand for its move-up houses remained stronger than other segments of the market.
Pessimism about U.S. stocks among newsletter writers increased the most since July 2007, a bullish signal to analysts who track investor sentiment as a contrarian indicator of share performance. The share of bearish publications among about 120 tracked by Investors Intelligence rose to 33.3 percent Tuesday, the highest level in a year, from 23.7 percent a week earlier.