US STOCKS-Housing data and weaker dollar lift markets

                                
 
                                
 * Manufacturing, housing data reinforce recovery hopes
                                
 * Dollar weakness spurs run-up in commodity shares
                                
 * Dow up 1.2 pct, S&P 500 up 1.2 pct; Nasdaq up 1.5 pct
                                
 * For up-to-the-minute market news, click [STXNEWS/US]
 (Updates to early afternoon)
                                
 By Ryan Vlastelica
                                
 NEW YORK, Dec 1 (Reuters) - U.S. stocks gained on Tuesday
as a weak dollar lifted commodity prices and home sales data
reassured investors about the state of the housing market,
considered one of the biggest drags on a recovery.
                                
 Sentiment also improved as concerns receded about the
impact of Dubai's debt woes, which some had feared could lead
to another global crisis.
                                
 The U.S. dollar index <.DXY> fell 0.7 percent against a
basket of currencies as waning anxiety about Dubai limited the
greenback's safe-haven appeal. For details, see
[ID:nN01332891]
                                
 "The initial shock over Dubai prompted a flight to
quality," said Dan Faretta, senior market strategist at
Lind-Waldock in Chicago. "Suddenly Dubai isn't a big fear, and
that relief is pushing the dollar down. That's why we're seeing
the market rally."
                                
 Crude oil futures gained 1.8 percent while the S&P Energy
Index <.GSPE> advanced 1.8 percent. The Materials Index <.GSPM>
surged 2.1 percent.
                                
 Pending sales of previously owned U.S. homes rose more than
expected in October, reassuring investors about the state of
the troubled sector. [ID:nN01495024]
                                
 Sales advanced to their highest level in 3-1/2 years,
according to data from the National Association of Realtors,
sending the Dow Jones home construction index <.DJUSHB> up 1.8
percent.
                                
 The Dow Jones industrial average <.DJI> rose 128.17 points,
or 1.24 percent, to 10,473.01. The Standard & Poor's 500 Index
<.SPX> gained 13.06 points, or 1.19 percent, to 1,108.69. The
Nasdaq Composite Index <.IXIC> climbed 32.67 points, or 1.52
percent, to 2,177.27.
                                
 Construction spending was flat in October, above the
expectation for it to slide in the month. In addition, the
Institute for Supply Management said that the manufacturing
sector expanded in November, though the expansion was less than
expected. [ID:nN01482360] and [ID:nN01377451]
                                
 Staples Inc <SPLS.O> jumped 6.4 percent to $24.82 after it
reported adjusted third-quarter earnings that beat expectations
and forecast sales growth in its fourth quarter.
[ID:nN30469390]
                                
 Shares of troubled insurer American International Group Inc
<AIG.N> surged 11 percent to $31.55 after it closed a pact with
the New York Federal Reserve Bank that slashes its debt under a
credit facility by more than half. [ID:nBNG432687]
                                
 The benchmark S&P 500 is up 63.9 percent from its 12-year
closing low on March 9.
 (Editing by Jan Paschal)
 ((ryan.vlastelica@thomsonreuters.com; Tel: +1 646-223-6014;
Reuters Messaging: ryan.vlastelica@reuters.com@reuters.net))