* Strong data may boost odds Fed will reduce stimulus
* Builders rally after Lennar results, data
* Walgreen slips after earnings, Netflix down on downgrade
* Indexes up: Dow 0.7 pct, S&P 0.8 pct, Nasdaq 0.5 pct
By Ryan Vlastelica
NEW YORK, June 25 U.S. stocks rose solidly on
Tuesday, partially recovering from recent steep declines as
strong data pointed to improvements in the economy.
Equities were volatile for much of the session, as the data
initially raised concerns about central bank stimulus, but
analysts said a rebound was due coming off a large drop in
Monday's session, which itself followed the worst week for the
S&P 500 since April.
"Everyone panicked after the Fed, but the fear is starting
to come out of the system now. Investors are realizing that the
Fed is still a long way from raising rates," said Mark Foster,
who helps manage $600 million at Kirr Marbach & Co in Columbus,
The recent downturn in markets started after Fed Chairman
Ben Bernanke last week said the Fed's stimulus program may be
scaled back this year if the economy improves, placing traders
in a paradoxical situation where good data could indicate less
stimulus, which would in turn be a threat to growth.
Data on durable goods orders and new home sales in May, and
consumer confidence in June, all topped analysts' expectations.
The April Case/Shiller report on home prices also was above
Housing stocks were among the strongest of the day, surging
on the data as well as because Lennar Corp posted strong
results and the company pointed to a "solid housing recovery."
The stock rose 1 percent to $35.34 while peer homebuilder
PulteGroup Inc was up 3.9 percent at $19.02. The PHLX
housing sector index climbed 1.7 percent.
The Dow Jones industrial average was up 95.22 points,
or 0.65 percent, at 14,754.78. The Standard & Poor's 500 Index
was up 11.58 points, or 0.74 percent, at 1,584.67. The
Nasdaq Composite Index was up 16.45 points, or 0.50
percent, at 3,337.21.
While the S&P is up 11 percent in 2013, the recent trend has
been negative, with the benchmark index dropping below both its
14-day and 50-day moving averages, seen as signs of near-term
market direction. It is down about 2.6 percent in June.
"The market trend has turned to the downside. It is now
easier to sell rallies than to buy dips," said Donald Selkin,
who helps oversee $3 billion in assets as chief market
strategist at National Securities in New York. "If we close
lower today, that would be a big blow to the bulls."
The S&P on Monday closed at its lowest level since April 22
after China's central bank said the country's banks need to do a
better job of managing their cash and due to continued worries
about a reduction in stimulus from the U.S. Federal Reserve.
On Tuesday, the People's Bank of China said it would not
press banks too hard in its efforts to curb easy credit and
prevent a possible banking crisis.
Carnival Corp jumped 4.4 percent to $34.68 after the
cruise ship operator named a new chief executive and affirmed
its full-year profit outlook.
On the downside, Walgreen Co slumped 7.6 percent to
$44.38 as the worst performer on the S&P 500 after reporting
weaker-than-expected results, citing slow front-end sales and a
Netflix Inc fell 2.1 percent to $211 after
Bernstein downgraded the stock to "underperform."
Barnes & Noble Inc tumbled 18.5 percent to $15.33
after the largest U.S. bookstore chain reported its quarterly
net loss more than doubled.