U.S. stocks advanced, recouping yesterday’s losses, on an unexpected rebound in homebuilding and speculation that the Federal Reserve will outline more plans to bolster the economy.

Citigroup Inc. and JPMorgan Chase & Co. rose at least 7.7 percent as the KBW Banks Index extended its gain since March 6 to 46 percent. KB Home led a rally in construction companies and Home Depot Inc. jumped 6.7 percent as housing starts unexpectedly climbed 22 percent in February, the biggest jump since 1990. Apple Inc. climbed 4.4 percent to help lead technology shares higher after updating its iPhone software.

The S&P 500 rose 3.2 percent to 778.12, led by a 6.6 percent gain in financial companies. The Dow Jones Industrial Average increased 178.73 points, or 2.5 percent, to 7,395.7. The Nasdaq Composite Index jumped 4.1 percent. About eight stocks rose for each that fell on the New York Stock Exchange.

The S&P 500 yesterday halted a four-day rally that had propelled the index up almost 12 percent from its 12-year low on March 9. The gains were triggered by optimism that the worst of the financial crisis was over after Citigroup, Bank of America Corp. and JPMorgan said they were profitable in the first two months of the year.

(Bloomberg.com)