April 29, 2013 / 5:01 PM / in 4 years

US STOCKS-Wall Street up, S&P nears record on Italy, data

* Italy forms government after months of uncertainty

* Apple sets groundwork for first ever debt sale

* Indexes up: Dow 0.7 pct, S&P 0.8 pct, Nasdaq 1.1 pct

By Rodrigo Campos

NEW YORK, April 29 (Reuters) - U.S. stocks climbed on Monday as Italy formed a government, relieving a two-month political stalemate and boosting investors’ appetite for risky assets, while better-than-expected housing data boosted market optimism.

The S&P 500, up six of the last seven sessions, was on track to set a record closing high.

Wall Street followed European stocks higher as Italy’s new Prime Minister Enrico Letta’s focus on growth and away from austerity in his inaugural speech lifted hopes for further stimulus from the European Central Bank.

Policymakers of the ECB and the U.S. Federal Reserve will meet separately this week, and the Fed is expected to maintain its stimulus measures. Data on Monday showing muted inflation continued to give the Fed room for accommodative measures.

“The market is moving mostly on good news from Europe,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, pointing to the drop in bond yields in Italy.

She said the expectation of further monetary easing from central banks was not the most desirable reason for the market to rise, but in absence of real growth, U.S. stocks will continue to follow the Fed’s lead.

A report showed contracts to buy previously owned homes rose last month to their highest level since April 2010, showing underlying strength in the housing market recovery, even though the pace of sales growth has cooled in recent months.

The Dow Jones industrial average rose 105.13 points or 0.71 percent, to 14,817.68, the S&P 500 gained 12.88 points or 0.81 percent, to 1,595.12 and the Nasdaq Composite added 35.12 points or 1.07 percent, to 3,314.39.

Apple led a 1.7-percent advance in technology stocks, the best performing sector. Apple was up 3.8 percent at $433.

The iPhone maker took initial steps for what would be its first debt sale, which is set to be one of the most anticipated bond sales of the year.

Of the 274 companies in the S&P 500 that have reported earnings to date for current season, 69 percent have beat analysts’ expectations and 43.2 percent have reported revenue above expectations.

The second half of the earnings season may not be as strong as the first one, data showed.

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