* Economic signs may cause Fed to delay scaling back
* Amgen, Onyx shares rise after announcing $10.4 billion
* United Tech unit reaches contract agreement with Pentagon
* Pritzker family to buy TMS International
* Dow up 0.2 pct, S&P 500 up 0.26 pct, Nasdaq up 0.62 pct
By Chuck Mikolajczak
NEW YORK, Aug 26 U.S. stocks advanced modestly
on Monday after sharply weaker orders for long-lasting
manufactured goods eased investors' worries that the Federal
Reserve would soon begin to scale back its economic stimulus.
Durable goods orders dropped 7.3 percent in July, the
biggest decline in nearly a year. In addition, a gauge of
planned business spending on capital goods tumbled, casting a
shadow over the economy early in the third quarter.
The reports and other data for July have suggested economic
growth this quarter will probably not accelerate as much as
economists had hoped.
Investors were heartened because the Fed has said any
decision to slow its $85 billion a month in bond purchases,
which has helped drive the S&P 500 index's rise of nearly 17
percent this year, depends on a recovering economy.
"Clearly the durable goods number, particularly if you dig
down in there, was not encouraging," said Hugh Johnson, chief
investment officer of Hugh Johnson Advisors LLC in Albany, New
"If there is anything that is driving the markets today, it
is that the durable goods numbers were weaker than expected and
that raises the question the Federal Reserve might not begin to
The benchmark 10-year U.S. Treasury note yield hit its
lowest in a week following the data. A recent spike in yields
has raised concerns that mortgage rates and consumer credit will
climb too high and harm the economy's recovery.
The Dow Jones industrial average rose 29.41 points or
0.2 percent, to 15,039.92, the S&P 500 gained 4.31 points
or 0.26 percent, to 1,667.81 and the Nasdaq Composite
added 22.747 points or 0.62 percent, to 3,680.539.
Amgen Inc was the biggest boost to both the S&P 500
and Nasdaq 100 indexes after it struck a deal to buy
cancer drug maker Onyx Pharmaceuticals Inc for about
$10.4 billion, sweetening its original offer made in June.
Onyx shares rose 5.7 percent to $123.62 and Amgen jumped 9
percent to $115.12. The NYSEArca biotech index climbed
U.N. chemical weapons experts interviewed and took blood
samples from individuals in a suburb of Syria's capital where
rebels said the government carried out a poison gas attack last
week. The inspectors' convoy came under fire.
Washington was all but certain that the government of
President Bashar al-Assad had gassed its own people.
Three sources familiar with the deal said on Monday that
Pratt & Whitney, a unit of United Technologies Corp, has
reached agreement in principle with the Pentagon on a contract
to build engines for F-35 Joint Strike Fighters in a deal valued
at over $1 billion. United Tech shares edged up 0.4 percent to
In another deal, the Pritzker Organization said it will
acquire scrap metal broker TMS International Corp for
$17.50 a share, a premium of about 12 percent to TMS's Friday
close of $15.57. shares gained 12.1 percent to