* Brent crude at 6-month high on concerns about supply
* Britain pushes UN Security Council for military action
* Pending home sales fall as mortgage interest rates rise
* Indexes up: Dow 0.48 pct, S&P 0.56 pct, Nasdaq 0.75 pct
By Chuck Mikolajczak
NEW YORK, Aug 28 (Reuters) - Wall Street rose on Wednesday as the United States and its allies appeared to edge closer to attacking Syria, which lifted energy stocks and world oil prices on concerns about supply.
Equities bounced back after two straight days of declines, including the S&P 500 index's biggest daily fall since June. That drop was triggered by heightened tensions over a possible Western military response to an alleged chemical weapons attack on Syrian civilians by President Bashar al-Assad's government.
The S&P 500 index had fallen 2 percent in the prior two days and the CBOE Volatility Index rose 20 percent, reflecting investor uncertainty.
"It seems like investors are weighing the uncertainty of what would appear to be a limited military strike against Syria, and we had the indigestion yesterday," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
At the United Nations Security Council Britain sought authorization for military action against Syria, a move certain to be blocked by Russia. U.S. officials in Washington described plans for multinational strikes on Syria that could last for days.
The Dow Jones industrial average rose 71.04 points or 0.48 percent, to 14,847.17, the S&P 500 gained 9.17 points or 0.56 percent, to 1,639.65 and the Nasdaq Composite added 26.682 points or 0.75 percent, to 3,605.206.
Brent crude hit a six-month high and U.S. crude hit its highest in more than two years on concerns foreign military action in Syria may further destabilize the Middle East.
The S&P energy index rose 1.9 percent to lead the top ten S&P sectors. Chevron, up 2.5 percent at $121.81, and Exxon Mobil, up 2 percent at $88.54, were the top boosts to the Dow Industrials.
"It's more or less just investors looking to add an asset class diversifier, an asset class that hasn't done much. It's been a drag all year. My sense is investors were probably underweight (energy stocks) so they probably want to build a position to hedge their bets," said Ablin.
In contrast, the concerns over higher oil prices dented airline stocks, with the NYSE Arca airline index off 0.7 percent after stumbling 3.9 percent in the prior session.
Gold prices rose to 3-1/2 month highs above $1,433 an ounce as the Syria tensions raised its appeal as a safe-haven asset.
On Wall Street, U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter. JPMorgan shares edged up 0.7 percent to $50.94.
Shares of mining equipment manufacturer Joy Global fell 3 percent to $49.75 after it reported a lower profit for the third quarter and said orders fell.
Contracts to purchase previously owned U.S. homes fell for the second straight month in July, a sign that rising mortgage rates are taking some steam out of America's housing market recovery.
PulteGroup Inc fell 1.2 percent to $15.42 and D.R. Horton Inc shed 1.6 percent to $17.71. The PHLX housing sector index dipped 0.06 percent.