* GDP, labor data points to improved economic strength
* Vodafone in talks with Verizon to sell out of venture
* Housing stocks rally, rebounding after recent decline
* Indexes up: Dow 0.3 pct, S&P 0.4 pct, Nasdaq 0.9 pct
By Ryan Vlastelica
NEW YORK, Aug 29 (Reuters) - U.S. stocks rose on Thursday as
data pointed to better-than-expected economic growth while
concerns over Syria receded as a potential Western military
strike on the country appeared to be delayed for now.
The market's gains were broad, with eight of the S&P 500's
10 sectors in positive territory. Housing stocks were among the
strongest of the day.
The U.S. economy expanded more quickly than expected in the
second quarter, with the preliminary read on gross domestic
product topping expectations. Separately, weekly jobless claims
fell more than anticipated in the latest week, a possible sign
that hiring improved in August.
The robust data could bolster the case for the Federal
Reserve to soon wind down a major economic stimulus program that
has driven a rally of more than 15 percent in the S&P 500 this
year. Many market participants expect an announcement about
scaling back the Fed's asset purchases after its next policy
meeting in mid-September.
The data "reiterates that the economy continues to grow,
which is supportive to risk assets and bodes well for the
prospect of future growth," said Joe Tanious, global market
strategist at J.P. Morgan Funds in New York.
"That the market is reacting positively to this shows that
investors have become more comfortable with the idea of
Recent market direction has been driven by geopolitical
uncertainties related to Syria and a potential retaliation
against the country's government allegedly using chemical
weapons on civilians. Over the past two sessions, the S&P has
gained about 0.9 percent but remains down 1.1 percent for the
A military strike could be delayed, not only by the
continued presence of U.N. weapons inspectors in Syria, but by
the Obama administration's efforts to coordinate with
international partners and growing demands for consultation with
Despite that, analysts said the issue was the primary
headwind facing markets.
"That there will be an attack is priced into markets, but
there's no way the market appreciates the implications beyond
that if the U.S. were to go to war," said Tanious, who helps
oversee $1.5 trillion in assets. "It will create a lot of side
effects the market isn't aware of, with the impact on oil the
Crude oil has spiked 3.3 percent this week on
concerns that tensions in the Middle East will impact oil
supplies. Brent crude is up 5 percent on the week,
though both dipped modestly on Thursday.
The Dow Jones industrial average was up 43.09 points,
or 0.29 percent, at 14,867.60. The Standard & Poor's 500 Index
was up 6.72 points, or 0.41 percent, at 1,641.68. The
Nasdaq Composite Index was up 32.52 points, or 0.90
percent, at 3,625.86.
The S&P broke above its 100-day moving average of 1,638.98,
a level that is viewed as an indication of near-term momentum.
The benchmark index has closed below it for the past two
Homebuilding stocks were among the strongest of the day,
rebounding after a period of recent weakness. Lennar Corp
rose 3.3 percent to $32.66 while PulteGroup Inc
was up 3.3 percent to $15.88 and D.R. Horton Inc gained
2.9 percent at $18.29. The PHLX Housing Sector Index
climbed 1.7 percent but remains down 0.7 percent on the week.
U.S.-listed shares of Vodafone Group jumped 7.5
percent to $31.61 as the biggest percentage gainer on the Nasdaq
100 index, after the company said it was in talks with
Verizon Communications to sell its 45 percent stake in
their U.S. joint venture, Verizon Wireless.
Verizon rose 2.8 percent to $47.85 as one of the top boosts
to the Dow.
US Airways Group Inc, American Airlines and the U.S.
Justice Department said on Wednesday they were open to settling
a court fight over whether the two companies should be allowed
to merge. US Airways rose 5.6 percent to $16.20.
Guess Inc jumped 12 percent to $30.65 in the wake of
second-quarter results that beat Wall Street estimates, bucking
a trend of falling sales for apparel retailers.