World stocks: Optimism pushes stocks up

NEW YORK - United States stocks rose, taking the Standard & Poor's 500 Index to its highest level in two months, after a larger-than-expected increase in factory orders boosted optimism that the economic rebound would lift earnings.

"The recession is pretty much behind us, so the market is seeking out companies with good prospects for the next year or two," said Howard Kornblue, managing director of value funds for ING Funds, which oversees US$35 billion ($81.4 billion).

The S&P 500 rose 16.67, or 1.5 per cent, to 1162.81, the highest since January 8.

The Dow Jones industrial average gained 141.23, or 1.4 per cent, to 10,574.78. The Nasdaq Composite Index was up 24.07, or 1.3 per cent, to 1890.36.

Mobile-phone companies had the S&P 500's biggest gains after Sprint Corp said it would meet this year's profit and subscriber forecasts.

Airlines rallied because of expectations that a resurgent economy would revive travel.

US factory orders rose for a second month in January, adding to evidence the economy is recovering. The Commerce Department said new orders placed with manufacturers increased 1.6 per cent, more than the 1.5 per cent rise predicted by economists.

A new bull market has begun, says Ned Davis Research, a Florida research firm. The Dow has gained 29 per cent in the more than 155 days from its September 21 low, meeting the firm's criteria for a bull market.

* In London, index heavyweight Vodafone led Britain's FTSE 100 index higher, as growing confidence in the economic outlook helped sentiment.

Vodafone jumped 4.8 per cent, boosted by Sprint's bullish report in the US.

Telecoms gave a 21-point boost to the index, which closed up 0.6 per cent at 5245.5.

- AGENCIES