* Dollar General offers to buy Family Dollar
* Homebuilders' stocks rise after upbeat economic data
* Russia: Humanitarian convoy issue resolved, but no
* Dow up 1 pct; S&P 500 up 0.8 pct; Nasdaq up 0.9 pct
(Updates to mid-afternoon)
By Akane Otani
NEW YORK, Aug 18 U.S. stocks surged on Monday,
with the Dow up roughly 1 percent and the Nasdaq at a 14-year
high as increasing homebuilder confidence and hopes for receding
tensions between Russia and Ukraine brightened investors' view
of the outlook for equities.
All three indexes extended gains from last week. The
tech-heavy Nasdaq, up around 0.9 percent, had climbed above the
key 4,500 mark, a level it has not seen since April 2000, and
the S&P 500 was back to within 1 percent of an all-time
high in early afternoon trading.
Homebuilders' stocks rose after the NAHB/Wells Fargo Housing
Market index showed that homebuilder sentiment rose for the
third straight month in August.
The PHLX housing sector index climbed 1.4 percent,
lifted by a rally in major homebuilders, including PulteGroup
Inc, up 2.2 percent at $18.67, and D.R. Horton Inc
, up 0.9 percent at $21.02.
Ambiguity lingered in Russia, where tensions with Ukraine
have recently rattled markets. Russian officials said on Monday
that while all issues related to the country's humanitarian
convoy to Ukraine had been resolved, progress had not been made
on reaching a cease-fire.
"Today, geopolitical threats from the Israel-Palestine
situation and from Ukraine and Russia have sort of taken a back
seat, and buyers are showing up," said Adam Sarhan, chief
executive of Sarhan Capital in New York.
The Dow Jones industrial average rose 167.75 points,
or 1.01 percent, to 16,830.66. The S&P 500 gained 15.26
points, or 0.78 percent, to 1,970.32. The Nasdaq Composite
advanced 40.15 points, or 0.9 percent, to 4,505.08.
Another supporting factor is an expectation that Federal
Reserve Chair Janet Yellen will signal later this week that the
central bank remains committed to providing easy money for some
time to come. She is scheduled to speak on Friday to central
bankers from around the globe in Jackson Hole, Wyoming, at an
annual conference hosted by the Federal Reserve Bank of Kansas
"The Fed remains accommodative, the economy is continuing to
improve, and earnings are more or less not disappointing, which
is all good news," Sarhan said.
A flurry of merger and acquisitions activity gave stocks
Discount retailer Dollar General Corp offered to buy
Family Dollar Stores Inc for $8.95 billion, trumping an
offer by Dollar Tree Inc. Family Dollar
shares gained 5 percent to $79.87. Dollar General jumped 10.4
percent to $63.43, ranking as the S&P 500's best performer.
Dow component Procter & Gamble Co is working with
advisers, including Goldman Sachs Group, as the world's
largest household products maker reviews up to 100
underperforming brands for potential divestiture, people
familiar with the matter said. P&G's stock shot up 1 percent to
(Reporting by Akane Otani; Editing by Chizu Nomiyama, Nick
Zieminski and Jan Paschal)