By Kate Gibson U.S. stocks on Monday rose for a third day, lifting the Dow industrials back into positive territory for 2010, on FedEx Corp.'s improved outlook and as investors welcomed a break from disappointing data. "While the first chapter of the recovery did contain some scary parts, the story should get less frightening as future chapters unfold," David Kelly, chief market strategist at J.P. Morgan Funds, wrote in a note. Poised for its first finish above its Dec. 31, 2009, close in five weeks, the Dow Jones Industrial Average (DJI) gained 71.45 points, or 0.7%, to 10,496.07. Twenty-five of the Dow's 30 components were rising, led by Bank of America Corp. (BAC), up 3%. International Business Machines Corp. (IBM) paced the blue-chip index's limited losses. Shares fell 0.3% after European Union launched a probe against IBM, reviving allegations that the company took unfair advantage of its dominant position in the mainframe computer market. IBM rejected the allegations, while blaming Microsoft Corp. (MSFT) and other rivals for arousing the EU action. The S&P 500 Index (SPX) climbed 9.09 points, or 0.8%, to 1,111.75, with telecommunications and industrial companies leading gains among its 10 industry groups. The Nasdaq Composite Index (RIXF) added 18.61 points, or 0.8%, to 2,288.08. For every stock on the decline, more than three were rising on the New York Stock Exchange, where volume neared 533 million shares as of 2:05 p.m. Eastern. After the major U.S. stock indexes slipped at the open, stocks turned higher after government data showed that new-home sales rebounded 23.6% in June. . "The headline pace is a little better than expected, and that could give stocks some further upside momentum after good earnings news from FedEx," said analysts at Action Economics. U.S. stocks soared last week, as second-quarter corporate results have so far largely yielded robust earnings and outlooks. Economic reports, however, have produced a more mixed picture of the recovery, so Monday's housing data from the Commerce Department proved a welcome change. Home builders fared well in the wake of the report, with PulteGroup Inc. (PHM) up 5.5%, D.R. Horton Inc. (DHI) gaining 3.2% and Hovnanian Enterprises Inc. (HOV) ahead 6.8%. Also, shares of Beazer Homes USA Inc. (BZH) were up 6.4% and Lennar Corp. (LEN) climbed 3.7%. Also bolstering sentiment, FedEx (FDX) on Monday raised its profit forecast for the first quarter and full year, citing better-than-expected growth in shipping volumes. Its shares were up 5.4%. . BP PLC (BP) is among those due to report earnings on Tuesday, with the oil company likely to take a big charge to cover cleanup costs in the Gulf of Mexico. In Europe, markets climbed modestly as investors overseas had their first chance to react to tests measuring the health of 91 of the continent's banks. Gold futures edged down to finish at $1,183.10 an ounce, while crude-oil futures added 10 cents to $79.08 a barrel on the New York Mercantile Exchange.
