(By Balachander) U.S. stocks rebounded sharply as Spain announced a structural reform plan and expectations rose that China's central bank may launch new stimulus measures to spur growth.
The S&P 500 Index gained 0.97 percent to finish at 1,447.16. The Dow Jones Industrial Average added 0.54 percent to end at 13,485.97. The Nasdaq Composite Index jumped 1.39 percent to close at 3,136.60.
Spain presented its 2013 draft budget, which included more economic reforms focused on spending cuts and additional steps to narrow its deficit, amid growing speculation that the country - one of the largest economies in Europe - will request a bailout from its eurozone partners.
Olli Rehn, vice-president of the European Commission, commented that the Spanish reform plans are "clearly targeted at some of the most pressing policy challenges." Rehn said Spain is facing important challenges to correct very sizable macro-economic imbalances that require a comprehensive policy response. The measures announced today are a further important step toward addressing these challenges.
Meanwhile, the National Bureau of Statistics reported that Chinese industrial profits dropped for a fifth month in August, raising speculation that the government will ease monetary policy next week.
On the U.S. economic front, durable-goods orders for August plunged 13.2 percent, sharply down from economists' expectations of a fall of 5.0 percent. New orders - excluding transportation - unexpectedly fell 1.6 percent, versus expectations of a 0.3 percent advance. In July, orders for durable goods rose 3.3 percent, while dropping 1.3 percent excluding transportation. Durable-goods orders measures the change in the total value of new orders for long lasting manufactured goods.
A report from the Bureau of Economic Analysis showed smaller than estimated expansion of the U.S. economy in the second quarter. The real gross domestic product rose at an annual rate of 1.3 percent in the second quarter, while expectations were for growth to be unrevised at 1.7 percent.
The number of Americans who continued to receive jobless benefits fell last week to a two-month low, government data showed. Jobless claims declined 26,000 to 359,000 for the week ended Sept. 22 from a revised 385,000, also fewer than economists' projection of 378,000 applications.
Another report showed pending home sales unexpectedly declined 2.6 percent in August after a rise of 2.6 percent in July. Pending home sales measure the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. Economists' expected pending home sales to inch higher by 0.3 percent.
Hot Stocks Of The Day: AAPL, TPX, DFS, FUL, THO, CPHD, PRGS, ACHN, DG, MKC, ZZ
In corporate news, Tempur-Pedic International Inc. (NYSE: TPX) jumped 14.41 percent after the maker of mattresses agreed to acquire rival Sealy Corp. (NYSE: ZZ) for about $1.3 billion. Sealy shares added 2.34 percent.
Apple Inc. (NASDAQ: AAPL) ended 2.43 percent higher, rebounding from a three-day losing streak.
Discover Financial Services (NYSE: DFS) surged 7.27 percent after the company posted better-than-expected quarterly earnings, helped by improvements in credit performance, solid organic growth and strong volume growth across its networks.
H.B. Fuller Co. (NYSE: FUL) shed 9.47 percent after the adhesives products company reduced its revenue guidance for 2012, citing a slight slow-down in industrial adhesives end-markets worldwide.
Thor Industries Inc. (NYSE: THO) advanced 5.75 percent after the maker of recreation vehicles posted higher quarterly earnings on sales growth of 15 percent.
Cepheid (NASDAQ: CPHD) tumbled 10.14 percent after the molecular diagnostics company said it expects revenue for the third quarter to be lower than expected, citing intermittent interruptions in the supply of Xpert cartridge parts.
Progress Software Corp. (NASDAQ: PRGS) added 10.80 percent after the company's adjusted quarterly earnings topped market expectations.
Achillion Pharmaceuticals Inc. (NASDAQ: ACHN) rallied 8.48 percent after the company reported positive proof-of-concept results from a study of its experimental hepatitis C drug.
Dollar General Corp. (NYSE: DG) declined 1.63 percent in pre-market trading after the discount retailer announced a public offering of 30 million shares of common stock.
McCormick & Company Inc. (NYSE: MKC) declined 1.81 percent after the spice maker's third-quarter sales were shy of consensus estimates.
European markets ended in the green, with Germany's DAX adding 0.19 percent to close at 7,290.02. France's CAC40 gained 0.72 percent to finish at 3,439.32. U.K.'s FTSE 100 rose 0.20 percent to end at 5,779.42.
Asian markets closed slightly mixed, with China's Shanghai Stock Exchange Composite Index up 2.60 percent to finish at 2,056.32. Japan's Nikkei 225 rose 0.48 percent to end at 8,949.87. Hong Kong's Hang Seng Index gained 1.14 percent to close at 20,762.29. India's BSE Sensex closed at 18,579.50, down 0.28 percent.
Commodity & Currency Scan
Crude oil futures jumped 2.60 percent to $92.32 per barrel, and natural gas futures added 2.18 percent to $3.285 per million metric British thermal units. Gold futures rose 1.48 percent to $1,779.6 per ounce, and silver futures climbed 2.27 percent to $34.17 per ounce.
In the currency market, the euro advanced 0.32 percent against the U.S. dollar to 1.2914. The British pound gained 0.43 percent against the greenback to 1.6236, while the dollar slipped 0.15 percent against the Japanese yen to 77.6200.