US STOCKS-Wall St up as China rebound offsets economy concerns

                                

                                
 * Weekly initial jobless claims up for second week
                                
 * Mortgage delinquencies climb in second quarter
                                
 * Philly Fed index snaps 10-month of contraction
                                
 * Chinese equities rebound
                                
 * Indexes up: Dow 0.5 pct, S&P 500 0.9 pct, Nasdaq 0.8 pct
                                
 * For up-to-the-minute market news, click STXNEWS/US
                                
 (Updates to mid-morning)
                                
 By Edward Krudy
                                
 NEW YORK, Aug 20 (Reuters) - U.S. stocks rose on Thursday
after a snap back in Chinese equities offset a surprise rise in
weekly jobless claims and other data that showed a mixed
picture of the economy.
                                
 The rally in the Chinese stock market, which had fallen as
much as 20 percent in the last two weeks, helped eased fears
about a key driver of the global economy.
                                
 The U.S. earnings picture was mixed as packaged food makers
H.J. Heinz Co <HNZ.N> and Hormel Foods Corp <HRL.N>  both beat
Wall Street estimates while retailer Sears Holding Corp
<SHLD.O> posted a surprise loss, sending its shares down 11
percent.
                                
 "I think (China) has given a boost to the U.S. market by
the snap back yesterday, but I expect the Chinese market to
consolidate more over the next weeks," said Bruce Zaro, chief
technical strategist at Delta Global Advisors in Boston.
                                
 Shares of AIG Inc <AIG.N> rose 30 percent to $34.70 after
newly appointed Chief Executive Robert Benmosche said he
expects the bailed-out insurer to be able to repay its federal
debts and boost value for shareholders, according to a report
by Bloomberg News. Please see [ID:nN20484709]
                                
 The Dow Jones industrial average <.DJI> was up 42.39
points, or 0.46 percent, at 9,321.55. The Standard & Poor's 500
Index <.SPX> was up 8.49 points, or 0.85 percent, at 1,004.95.
The Nasdaq Composite Index <.IXIC> was up 15.47 points, or 0.79
percent, at 1,984.71.
                                
 U.S. mortgage delinquency rates continued to climb in the
second quarter, while the percentage of loans that entered the
foreclosure process dipped slightly, the Mortgage Bankers
Association said.
                                
 Initial claims for state unemployment insurance benefits
rose by 15,000, when analysts polled by Reuters had forecast
new claims slipping.
                                
 But factory activity in the U.S. Mid-Atlantic region turned
positive in August, breaking a 10-month run of contraction,
helped by a jump in new orders, a survey by the Philadelphia
Federal Reserve Bank showed.
                                
 Shares in Heinz rose 2.5 percent to $38.87, while Hormel
gained 1.2 percent to $37.65.
 (Reporting by Edward Krudy; Editing by Padraic Cassidy)