Wall Street gains on data, rising oil prices

NEW YORK (Reuters) - Stocks rose on Wednesday as stronger-than-expected economic data helped lift energy stocks, overshadowing concerns a European Union summit will not yield tangible progress in easing the debt crisis.

The energy sector <.GSPE> showed the strongest gains among the 10 major S&P 500 groups, rising 1.9 percent as oil prices settled higher at $80.21 a barrel. Cabot Oil & Gas Corp jumped 9 percent to $41.24 and was the biggest advancer on the S&P 500.

Worries about Europe have fed dramatic selloffs in stocks lately, but the declines have been tempered by enough short-term buying to keep the market confined to a range.

Sentiment was helped by better-than-expected sales of long-lasting U.S. manufactured goods in May, although excluding transportation and defense items, orders were down.

In other data, signed contracts for home purchases jumped to a seven-month high. The PHLX housing sector index <.HGX> climbed 3 percent, taking the year-to-date gains near 26 percent.

Shares of Lennar Corp , the third-largest U.S. homebuilder, rose 4.8 percent to $28.70 after it reported a rise in new orders for the fifth straight quarter.

"Sentiment is pretty negative. When you get people this depressed, markets have a tendency to bounce and that is pretty much where we are at right now," said Doug Foreman, director of equities at Kayne Anderson Rudnick Investment Management, an affiliated manager of Virtus Investment Partners in Los Angeles, California.

Arena Pharmaceuticals Inc's surged 28.7 percent to $11.39 on news that U.S. health regulators approved the drugmaker's pill to treat obesity, the first weight-loss drug in 13 years. The Nasdaq biotech index <.NBI> gained 1.5 percent.

But uncertainty remained ahead of the euro zone leaders' summit, which begins on Thursday. Few anticipate anything concrete to emerge from the two-day meeting after German Chancellor Angela Merkel said debt sharing, an idea backed by France, Italy and Spain, would not happen in her lifetime.

Healthcare stocks were in focus heading into Thursday's U.S. Supreme Court decision on President Barack Obama's 2010 healthcare law. Some investors have their attention on stocks less likely to be affected by the ruling, such as large pharmaceuticals.

Many investors expect the requirement that uninsured Americans purchase health insurance to be overturned, "so people have had plenty of time to position their portfolios for that," said Foreman.

The Dow Jones industrial average <.DJI> gained 93.32 points, or 0.74 percent, to 12,627.99. The Standard & Poor's 500 Index <.SPX> advanced 11.89 points, or 0.90 percent, to 1,331.88. The Nasdaq Composite Index <.IXIC> added 21.26 points, or 0.74 percent, to 2,875.32.

The market's rise came on light volume of 5.75 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq. The daily average year-to-date is 6.84 billion.

Shares of Vivus Inc and Orexigen Therapeutics Inc jumped following the FDA approval of Arena's obesity drug. The companies are also hoping to bring their medicines to market. Vivus shares were up 7.4 percent to $28.33 and Orexigen Therapeutics rose 20.3 percent to $4.92.

Some of Wall Street's top analysts published their research on Facebook Inc , and most are cautiously optimistic. Facebook shares fell 2.6 percent to $32.32 after gaining more than 20 percent in the prior two weeks.

Advancing stocks outnumbered declining ones on the NYSE by 2,354 to 654, while on the Nasdaq, advancers beat decliners 1,766 to 706.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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