* Higher oil price boosts the energy sector
* U.S. consumer mood improves more than predicted in Aug
* Housing data mixed but traders focus on positives
* Financials rebound, led by Fannie Mae, Freddie Mac
(Updates to midday)
By Richard Leong
NEW YORK, Aug 26 (Reuters) - U.S. stocks rose in light
volume on Tuesday, as higher oil prices boosted the energy
sector and a report showing a pickup in consumer confidence in
August soothed anxieties about the economy.
A batch of fresh housing data was mixed, but investors
focused on the less gloomy aspects of these reports in hopes
they signaled a stabilization in the battered housing sector.
Financial companies that had fallen sharply on Monday on
credit fears also bounced back, helping to support the market.
"It's fair to say two things: the economic data calendar
gave us a mixed message today on balance, and the market may
well be moving more on the fact that oil's up $2.50," said
Arthur Hogan, chief market analyst at Jefferies & Co in
Boston.
Energy companies led the S&P 500 higher as oil<CLc1> rose
as much as 2.4 percent on concerns about possible disruption to
oil and natural gas output in the U.S. Gulf from a
strengthening Hurricane Gustav.
Exxon Mobil <XOM.N> was the biggest boost to the S&P 500,
rising 1.1 percent to $79.55. The S&P energy index <.GSPE> was
up 1 percent in midday trading.
The Dow Jones industrial average <> was up 11.72
points, or 0.10 percent, at 11,397.97. The Standard & Poor's
500 Index <.SPX> was up 3.56 points, or 0.28 percent, at
1,270.40. The Nasdaq Composite Index <> was up 1.66
points, or 0.07 percent, at 2,367.25.
Shares of Anadarko Petroleum <APC.N> jumped 6 percent after
the company announced a share repurchase program of up to $5
billion.
The gain in the price of oil weighed on companies
particularly sensitive to higher fuel costs, such as airlines.
An index of airline stocks <.XAL> was down 1.5 percent.
HOUSING STABILITY
Tuesday's data on housing showed a record annual drop in
home prices and rising delinquencies on mortgages, but also
pointed to a slowing pace of price declines and a drop in hefty
new-home inventories.
The Standard & Poor's/Case-Shiller national home price
index showed prices of U.S. single family homes fell at a
record pace in June from a year earlier, but the rate of
decline slowed from May, suggesting the battered housing sector
may be stabilizing. [].
"Things are improving," said Jack Ablin, chief investment
officer at Harris Private Bank in Chicago. "But it's still
going to take another year to work out the housing problem."
"Our housing crisis will become more of a regional issue,"
he added.
Nine of the 20 cities tracked in the S&P/Case-Shiller
report showed increases in home prices in June, up from seven
in May.
A turnaround in the housing market could go a long way to
help consumers who have been saddled by high food and gas
prices and a worsening job market.
The Conference Board's consumer confidence index rose to
56.9 in August from 51.9 in July, above the 53.0 forecast by
analysts polled by Reuters. []
On the Nasdaq, Marvell Technology Group <MRVL.O> shares
fell 7.4 percent after Jefferies & Co. downgraded the stock on
concerns about the microchip design company's hard disk drive
inventory and its weak cellular positioning.
Among big board shares, embattled mortgage finance giants
Fannie Mae <FNM.N> and Freddie Mac <FRE.N> rallied on
speculation any rescue would not wipe out shareholder value.
"I think there's a lot of speculation that maybe the
shareholders will get bailed out. So shareholders think, 'If I
buy this at $3 to $5 a share and the shareholders get bailed
out, I'm going to do great.' They're certainly not doing it on
the basis of fundamentals," said Mark Coffelt, chief investment
officer at Texas Capital Value Funds in Austin, Texas,
Fannie's shares rose 12 percent to $5.80 and Freddie's
shares jumped 20 percent to $3.96.
An index of financial companies <.BKX> gained 0.8 percent.
(Additional reporting by Kristina Cooke; Editing by Leslie
Adler)
