By Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks climbed Thursday, with the Dow industrials bouncing back after their largest hit in four weeks, as another report cast a positive light on the U.S. housing market.

Stock indexes retained gains after the National Association of Realtors reported pending sales of homes rose 0.3% in April.

Other reports Thursday had the U.S. economy growing less than expected last quarter and jobless claims rising more than estimated last week.

"The housing market continues to look good, and GDP growth is slow and steady, which is actually a good environment for stocks," said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research.

Since start of the bull market, now in its fourth year, "You kept hearing you can't have an economic recovery until you had participation by the housing market. It started in the middle of last year, in the June-July time frame. So now, almost a year later, it's pretty clear that has happened," said Frederick.

The Dow Jones Industrial Average (DJI) rose 83.43 points to 15,386.23, with 23 of its 30 components advancing.

Bank of America Corp. (BAC) led blue-chip gains.

Dow member Alcoa Inc. (AA) fell 0.1% after Moody's Investors Service reduced its rating on the aluminum manufacturer's debt to one notch below investment grade.

With one trading session remaining in May, the S&P 500 index (SPX) is up 4% month-to-date, positioning for it for a seventh consecutive monthly gain, which would be its longest monthly win streak since one ending in September 2009.

On Thursday afternoon, the S&P 500 index added 11.75 points to 1,660.11, with financials leading sector gains and telecommunications losing the most ground among its 10 major industry groups.

"Those pundits that had you reaching for yield for the last few months in the utilities, REITS (real estate investment trusts) and telephone sectors are all hiding under a rock now," Elliot Spar, market strategist at Stifel, Nicolaus & Co., wrote in afternoon commentary.

"In the last few days many defensive names have come under pressure as money flowed out of them into cyclicals," said Spar, adding that part of the catalyst for the flow was the 10-year Treasury yield remaining over 2%.

A clear break of support at 2% "could be the catalyst for some profit-taking in the cyclical and financials that have attracted money," he concluded.

On Thursday, Treasury prices fell, with the 10-year yield (10_YEAR) lately at 2.122%.

The Nasdaq Composite (RIXF) climbed 35.52 points to 3,503.91.

For every stock on the decline, nearly two gained on the New York Stock Exchange, where 422 million shares traded as of 3:05 p.m. Eastern.

Composite volume exceeded 2.5 billion.

A volatile Japanese market remained in the headlines. The Japanese yen (USDJPY) fell against the U.S. dollar (DXY) and Japan equity index futures bounced higher after Reuters reported a proposed change in Japan's public pension fund's strategy would likely bolster equity markets while denting the nation's currency. U.S. stock-index futures also gained after that report.

Gold futures gained $20.20 to end at a more-than-two-week high of $1,412 an ounce on the Comex division of the New York Mercantile Exchange. And, crude-oil futures (CLN3) reversed course to settle up 48 cents att $93.61 a barrel on the New York Mercantile Exchange.

Noteworthy movers on Thursday included Clearwire Corp. (CLWR), up 26%, after Dish Network Corp. (DISH) upped its offer for the company, upping the ante in a bidding competition with Sprint Nextel Corp. (US-S)

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