U.S. Stocks Advance on Pending Home Sales, Crude Oil's Decline

April 3 (Bloomberg) -- U.S. stocks rose, pushing the Dow Jones Industrial Average to a fourth day of gains, after pending home sales topped economists' forecasts and oil prices dropped.
Home Depot Inc. and Best Buy Co. led retailers higher. Industrial companies advanced after Caterpillar Inc. said engine sales may increase on a $29 billion free-trade accord between the U.S. and South Korea. Google Inc. helped lift the Nasdaq Composite Index after Goldman, Sachs & Co. recommended buying the shares.
More Americans signed contracts to buy previously owned homes last month, bolstering speculation the housing market is starting to stabilize. Crude's steepest retreat in three weeks reduces inflation, which the Federal Reserve has cited as its main concern, and may spur more consumer spending.
``The market's going to rebound when oil sells off,'' said Andy Brooks, Baltimore-based head equity trader at T. Rowe Price Group Inc., which manages about $335 billion. A drop in oil will ``allow consumer spending to continue.''
The Dow average climbed 98.74, or 0.8 percent, to 12,481.04 as of 10:07 a.m. in New York. The Nasdaq added 23.58, or 1 percent, to 2445.84. The Standard & Poor's 500 Index gained 10.20, or 0.7 percent, to 1434.75.
Housing Data
The index of signed purchase agreements, or pending home resales, rose 0.7 percent to 109.3, after a revised 4.2 percent drop in January, the National Association of Realtors said. Economists surveyed by Bloomberg expected pending sales to drop 0.5 percent.
Stocks yesterday rose on the first trading day of the Dow average's best month, helped by more than $44 billion in takeovers. Asian and European stocks gained today as investors bet acquisitions will lift shares.
``Private equity funds have a tremendous amount of money to put to work,'' said Barbara Marcin, who manages $3 billion at Gamco Investors Inc. in Rye, New York. ``They're willing to buy very large companies, so it looks as though it's going to continue for a while.''
Announced U.S. acquisitions have totaled $641 billion so far in 2007, exceeding the $442.3 billion amount at this point last year, which was a record year for takeovers.
Home Depot, Best Buy
Retailers were the best performers among two dozen industry groups, climbing 1.6 percent. Home Depot, the world's biggest home-improvement retailer, rose 80 cents to $37.59. Best Buy, the largest consumer electronics retailer, added $1.11 to $49.59.
Consumer spending accounts for about two-thirds of the U.S. economy.
Crude oil fell 1.1 percent to $65.19 a barrel in New York, the steepest decline since March 13. U.K. Prime Minister Tony Blair said Britain wants to maintain ``peaceful and calm negotiations'' with Iran to free 15 sailors and marines. Iranian Vice President Parviz Davoudi said he expects the conflict to be resolved ``soon,'' Agence-France Presse reported.
Oil has pulled back after reaching a six-month high last week.
Caterpillar, which gets about a third of its revenue selling engines, gained 54 cents to $67.29. The company said sales of the machines may rise from the free-trade pact, which if ratified by the U.S. Congress, would be the largest for the country since the North American Free Trade Agreement in 1994.
Caterpillar's engine exports to South Korea are currently taxed at 8 percent, a tariff which would be eliminated under the agreement, Jim Dugan, Beijing-based spokesman for the company, said in a phone interview.
United Technologies
Among other industrial shares, United Technologies Corp. climbed 64 cents to $65.36. Credit Suisse Group added the maker of Chubb security and Kidde fire systems to its U.S. focus list. The stock has ``attractive'' odds of rallying, ``along with solid defensive characteristics,'' Credit Suisse's investment policy committee wrote in a report.
Google increased $6.28 to $464.81. Shares of the most popular Internet search engine were recommended by Goldman's Anthony Noto. The company may report revenue growth of 55 percent in 2007, the analyst wrote, exceeding the average 13 percent increase estimated by analysts surveyed by Bloomberg.
Assurant Inc. advanced $1.88 to $55.85. The specialty insurer will replace Realogy Corp. in the S&P 500. The addition may support Assurant's stock price as money managers tracking the S&P 500 purchase the company's shares. Index funds with $1.26 trillion in assets mimic the measure, according to S&P.
Lawson Software
Lawson Software Inc. jumped 52 cents to $8.55. The maker of business-management programs said fiscal third-quarter revenue was as much as $192 million. That tops the average estimate of $186.8 million by analysts in a Bloomberg survey.
More than nine stocks gained for every two that fell on the New York Stock Exchange. Some 250 million shares changed hands on the Big Board, 31 percent more than the same time a week ago.
Bunge Ltd. dropped $6.29 to $77.40. The world's biggest oilseed processor said first-quarter results would be about break-even or below analysts' estimates because of lower agricultural commodity prices.
Fremont General Corp. declined 42 cents to $6.10. The company, ordered to stop offering mortgages to the riskiest borrowers, said Grant Thornton LLP is resigning as its auditor.