* October existing home sales highest in 2-1/2 years
* Fed official's comments weigh on U.S. dollar
* Dow up 1.1 pct, S&P up 1.2 pct, Nasdaq up 1.2 pct
* For up-to-the-minute market news, click []
(Updates to afternoon, changes byline)
By Edward Krudy
NEW YORK, Nov 23 (Reuters) - U.S. stocks rose on Monday,
with the S&P 500 on track to snap a three-day sell-off as
stronger-than-expected home sales data fueled optimism about
the economic recovery while a weaker dollar boosted
commodity-linked stocks.
Sales of previously owned U.S. homes rose to their highest
level in more than 2-1/2 years. That helped to ease concerns
about the housing recovery generated last week when another
report showed housing starts fell sharply in October.
Monday's data reassured investors who have fretted over the
economy as unemployment rose and consumer confidence fell.
Stocks rallied broadly with all 10 S&P sectors showing strong
gains.
"We had one bad (housing) start number and people were so
willing to talk about a double dip (recession)," said Jim
Paulsen, chief investment officer at Wells Capital Management.
"The great bulk of the evidence says there's definitely been a
recovery going on in housing and today certainly adds to
that."
The Dow Jones industrial average <> gained 117.07
points, or 1.13 percent, to 10,435.23. The Standard & Poor's
500 Index <.SPX> added 12.95 points, or 1.19 percent, to
1,104.33. The Nasdaq Composite Index <> rose 25.12 points,
or 1.17 percent, to 2,171.16.
Among home builders, D.R. Horton <DHI.N> rose 2.3 percent
to $10.61 and MDC Holdings Inc <MDC.N> gained 0.8 percent to
$30.84 after National Association of Realtors said existing
home sales rose 10.1 percent in October. []
The U.S. dollar fell <.DXY> 0.7 percent against major
currencies after St. Louis Federal Reserve President James
Bullard said the Fed should extend its mortgage-related assets
purchase program. []
The comments alarmed dollar investors worried that low
interest rates for an extended period would diminish returns on
their assets.
The slide in the dollar helped lift commodity stocks as
gold hit a record $1,170.55 an ounce and copper rose to levels
not seen for 14 months, helped also by expectations of
recovery.
Newmont Mining Corp <NEM.N> rose 2.2 percent to $53.41. The
Dow Jones U.S. industrial metals and mining index <.DJUSIM>
added 0.6 percent.
A weaker dollar increases dollar-denominated commodity
prices as local manufactures demand more dollars for their
products, while also helping to boost U.S. export earnings.
News that U.S. President Barack Obama's healthcare reform
plan cleared an important Senate hurdle over the weekend helped
push The Morgan Stanley Healthcare Payor index <.HMO> up 3.5
percent, while the AMEX Pharmaceutical index <.DRG> was up 1
percent.
On the downside, Ciena Corp <CIEN.O> shed 8.4 percent to
$12.01 after it agreed to buy the optical networking and
ethernet equipment businesses of bankrupt Nortel Networks
<NRTLQ.PK>.
(Reporting by Edward Krudy; Editing by Kenneth Barry)
((edward.krudy@thomsonreuters.com; Tel: +1 646-223-6314;
Reuters Messaging: edward.krudy@reuters.com@reuters.net))
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