US stocks rose on economic upbeat

US stocks climbed yesterday triggering the biggest three days  gain period since January, on better than estimates data and after the quarter 1 GDP report on Wednesday which led to speculation about Fed keeping the stimulus program for a little longer.

Consumer spending in the U.S. rebounded in May offsetting the largest drop in more than three years. Housing purchases, which account for about 70% of the economy, recorded gains of 0.3% after decline with the same amount previous month. Incomes advanced 0.5%, beating projection. This avalanche of positive data rallied the economy to a third day of significant gains almost erasing previous retreat.

The Standard & Poors raised 0.6 % to 1,613.20 at 4 p.m. in New York Stock Exchange. The Dow Jones Industrial average climbed 0.8%, to 15,024.49.  The S&P 500 has advanced 2.6% in the past three days, the most since January and diminishing its decline for the month to 1.1%. The index dropped more than 5% from May 21 through June 24 on statements that Fed may reduce its bond purchases if the economy and labor market improve as forecast. Gains were covering nine of the S&P 500s 10 sectors, led by the financial, industrial and telecommunication sectors.

“The data continues to show that the economy is growing at a very slow pace and that unemployment is improving at a very slow pace,” Oliver Pursche, co-manager of the GMG Defensive Beta Fund said in a phone interview for Bloomberg. “It means the likelihood that the Federal Reserve changing course on its monetary policy this year is very low, and that further solidifies the case that last week’s correction was emotionally driven and an overreaction.” he added.

In US corporate news, Clearwire lost 2.06% after Dish Network decided to give up on bidding for the company after Clearwire shareholders supported a rival bid from Sprint Nextel. ConAgra Foods advanced after the company measured fourth-quarter profit and the packaged-food companys sales continued to improve. Paychex plunged 3.66% after the payroll and human-resources outsourcing companys quarterly earnings fell short of analysts estimates.