* Fears of double-dip recession ease
* Investors welcome rebound in business spending
* Dow up 1.9 pct, S&P up 2.1 pct, Nasdaq up 2.1 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to late afternoon, changes byline)
By Ryan Vlastelica
NEW YORK, Sept 24 (Reuters) - U.S. stocks climbed in a broad advance on Friday, on track for four consecutive weeks of gains as traders revived an atypical September rally after three days of losses.
Economic data gave a mixed picture on Friday, but traders latched on to a rise in August business spending as the latest sign the recovery is on firmer ground. That seemed to trump a lackluster read on new home sales in August. For details, see [ID:nN24184114]
"Last month investors were positioned for what we thought would be a double-dip recession and massive inflation, but since it ended up being not nearly so bad, we've swung the other way," said Lawrence Glazer, managing partner at Mayflower Advisors in Boston.
Buying was broad across sectors, with about five stocks rising for each one that fell on both the New York Stock Exchange and Nasdaq. For September, the S&P 500 is up 9.4 percent.
Volume was on course for another moderate day and indexes were up about 2 percent. Around 5.6 billion shares traded on the NYSE, Amex and Nasdaq by early afternoon.
"The volume suggests there's not broad retail participation, and to have conviction in the rally you'd like to see that," Glazer said.
The Dow Jones industrial average <.DJI> was up 197.04 points, or 1.85 percent, at 10,859.46. The Standard & Poor's 500 Index <.SPX> was up 23.42 points, or 2.08 percent, at 1,148.25. The Nasdaq Composite Index <.IXIC> was up 49.89 points, or 2.14 percent, at 2,376.97.
Traders noted that a short bias going into the open this morning had been chased out when the market held its gains after the uninspiring housing data. That pushed prices up as traders covered short positions.
The broad-based index crossed a major resistance level at 1,130 on Monday, but its close below that mark in the last session and light trading volumes have caused some investors to question the move's sustainability.
Other technical indicators are pointing to an overbought condition in the S&P 500, although the declines of the last three days have eased that somewhat.
Analysts say that long-term buyers are not fully participating in the rally, making the market more susceptible to a reversal in direction.
"The volume isn't indicative of people piling in, there's no mad rush to buy," said Joseph Greco, a managing director at Meridian Equity Partners in New York. "We're coming into the end of the quarter and no one wants to get caught short."
Even so, the S&P 500 also retook its 61.8 percent retracement of its April-to-July fall at 1,140, which can be an important level for traders.
Shares of builder KB Home
Nike Corp
All 30 components of the Dow industrials rose, along with
Advanced Micro Devices Inc
Boosting investor sentiment was the share offering of Brazilian state oil company, Petrobras. The sale of nearly $70 billion in shares surpassed expectations, erasing concerns that stocks were less attractive assets. [ID:nN2499993]
(Editing by Kenneth Barry)