* Industrial output tops estimates
* Weaker dollar boosts stocks
* Indexes up: Dow by 1 pct, S&P 1.3 pct, Nasdaq 1.3 pct
(Updates to late afternoon)
By Caroline Valetkevitch
NEW YORK, Sept 16 (Reuters) - U.S. stocks rose for a third
straight day on Wednesday as weakness in the dollar lifted
commodity and industrial shares while data underscored optimism
that the economy was improving.
Shares of industrial companies that benefit from a weaker
dollar gained, including General Electric Co <GE.N>, up 5.9
percent at $16.94. The dollar's decline also boosted
commodities prices, which in turn lifted shares of natural
resource companies.
"The dollar continues to get pounded. That translates into
higher commodity stocks, and industrials continue to be a
beneficiary," of the dollar's weakness, said Michael James,
senior trader at regional investment bank Wedbush Morgan in Los
Angeles.
U.S. industrial output advanced for a second consecutive
month in August, while higher gasoline costs pushed up consumer
prices, although economists said the risk of inflation remained
low. For details, see []
That added to optimism that the economy was getting better,
a day after Federal Reserve Chairman Ben Bernanke said the
recession was "very likely" over.
Financial companies also were top gainers, with the S&P
financial index <.GSPF> up 2.5 percent.
The Dow Jones industrial average <> was up 98.55
points, or 1.02 percent, at 9,781.96. The Standard & Poor's 500
Index <.SPX> was up 14.08 points, or 1.34 percent, at 1,066.71.
The Nasdaq Composite Index <> was up 26.92 points, or 1.28
percent, at 2,129.56.
The S&P hit a high for the year shortly after the open,
and is now up about 56 percent from the March 9 low. The
dollar, meanwhile, dropped to near one-year lows against the
euro and a basket of currencies.
Adding to the positive tone was the latest sign that merger
and acquisition activity was picking up. Adobe Systems Inc
<ADBE.O> said it plans to pay $1.8 billion for Omniture Inc,
<OMTR.O> whose software analyzes Web traffic. Adobe, the maker
of Photoshop and Acrobat software, is looking to turn around
declining sales. []
Adobe was down 6.6 percent at $33.28, while Omniture
advanced 26.7 percent to $21.95.
HMO shares advanced after Democrat Senator Max Baucus said
his health-care overhaul can pass the Senate. A health-care
stock index <.HMO> was up 1.7 percent.
Shares of Exxon Mobil Corp <XOM.N> gained 1.1 percent to
$70.24 as oil futures <CLc1> rose 2 percent. Oil <CLV9> at one
point rose above $72 a barrel on Wednesday.
Gold prices hit 18-month highs. Freeport-McMoran Copper &
Gold Inc <FCX.N>, up 1.4 percent to $72.35.
(Reporting by Caroline Valetkevitch; Editing by Kenneth
Barry)
