U.S. stocks advanced for a second day as sales of existing homes unexpectedly increased and a manufacturing gauge topped economists’ estimates, overshadowing concern General Motors Corp. will file for bankruptcy. Standard Pacific Corp. led gains in 12 of 13 shares in a gauge of homebuilders as the National Association of Realtors reported a 2.1 percent gain in pending home resales in February. Citigroup Inc. and Bank of America Corp. added at least 3.5 percent. GM slid 9.3 percent after people familiar with the matter said President Barack Obama believes a bankruptcy is the most likely way for the company to restructure. The Standard & Poor’s 500 Index rose 1 percent to 805.59 at 12:02 p.m. in New York, a day after capping its best monthly rally since 2002. The Dow Jones Industrial Average increased 89.84 points, or 1.2 percent, to 7,698.76. The MSCI World Index of 23 developed nations added 1.2 percent, with Ireland and Denmark posting the best gains. “From a fundamental standpoint the table has been set for financial markets to stabilize and rebound,” said William Greiner, chief investment officer at UMB Bank, which manages $9.5 billion in Kansas City, Missouri. With stocks at what he thinks will be the low end of their range over the next five years, Greiner recommended clients begin “putting some money back to work in the equity market.” U.S. stocks rose yesterday as investors bought March’s best-performing companies. The S&P 500 has climbed almost 19 percent since March 9, trimming its 2009 decline to 11 percent, as banks from Citigroup to JPMorgan Chase & Co. said they made money in the first two months of 2009 and U.S. Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets. Homebuilders Advance Standard Pacific, the homebuilder that gets most of its revenue from California, rallied 8 percent to lead a gauge of homebuilders across S&P indexes to a 4.3 percent gain. Foreclosure-driven declines in home prices and lower mortgage rates will lure more buyers and help trim the property glut. Economists project the housing downturn may ease further as efforts to thaw credit and offer tax breaks to first-time buyers begin to take hold. Centex Corp., the second-largest U.S. homebuilder by sales, rose 7.6 percent to $8.07. KB Home, the fourth-largest, gained 6.5 percent to $14.04. GM Bankruptcy Concern GM lost 18 cents to $1.76. Obama believes a quick, negotiated bankruptcy is the most likely way for GM to restructure and become competitive, people familiar with the matter said. Obama also is prepared to let Chrysler LLC go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat SpA, said members of Congress who were briefed on the GM and Chrysler situation before the president said two days ago that the automakers’ viability plans were insufficient. Citigroup, which has received about $45 billion in government rescue funds, rose 6.7 percent to $2.70 for the biggest gain in the Dow industrial average. Huntington Bancshares Inc. rose 10 percent to $1.83 for the largest advance in the S&P 500. The Ohio-based bank restructured its relationship with Franklin Credit Management Corp. for a 0.29 percentage point increase in its tangible common equity ratio and one-time savings of $160 million, it said. Gains were limited as Celgene Corp. led a 1.2 percent decline in healthcare companies. Celgene fell 15 percent, the most since September, to $37.91. The biotechnology company that makes most of its sales from the cancer drug Revlimid said it expects 2009 profit at the lower end of its previously forecast range. Apollo, Aflac Drop Apollo Group Inc. lost 15 percent to $66.49. The owner of the for-profit University of Phoenix was cut to “neutral” from “outperform” at Robert W. Baird Ltd., which cited lower 2010 earnings estimates, increased investments and potentially higher bad debt. Aflac Inc. dropped 3.3 percent to $18.72. S&P downgraded hybrid debt issued by more than 60 European firms. Aflac, the largest seller of supplemental insurance, said in February that downgrades of such securities may force the company to take more writedowns this year. The ouster of GM and Citigroup from News Corp.’s global stock index is leading to calls for Rupert Murdoch’s company to also remove them from the 112-year-old Dow Jones Industrial Average. GM and Citigroup were dropped from the 150-stock Global Dow after “extraordinary market conditions” pushed down the shares more than 88 percent in the past year, News Corp. said in a March 27 press release. They are among five stocks in the 30- company Dow industrials that closed below $10 this year.

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