US STOCKS-Wall St higher after CBO report, durables data

* Durable goods come in much stronger than expected

* Bank of America higher on heavy volume

* Indexes up: Dow 0.9 pct, S&P 1.1 pct, Nasdaq 0.9 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to early morning)

By Ryan Vlastelica

NEW YORK, Aug 24 (Reuters) - U.S. stocks rose on Wednesday after the Congressional Budget Office offered an upbeat forecast on the worrisome budget deficits and data showed a strong reading on durable goods orders.

In a sign volatility was still a constant, equity indexes rebounded from steep premarket losses following the durables data. All S&P sectors were in positive territory.

The government reported that new orders for long-lasting U.S. manufactured goods surged in July. For details, see [ID:nN1E77N096]

The Congressional Budget Office reported that a sweeping U.S. budget deal and lower interest rates will slice projected budget deficits nearly in half over the next 10 years. [ID:nN1E77N0JA]

The news provided a diversion to investors, fixed on hopes that Federal Reserve Chairman Ben Bernanke would announce new stimulus for a struggling U.S. economy in a speech in Friday. Hopes for such a plan fueled a 3 percent rally in Tuesday's session.[ID:nN1E77I0NF]

Bernanke, however, is most likely to outline gradualist measures, which would disappoint investors looking for a big bang approach, such as a fresh round of bond buying. [FED/AHEAD]

"The durable goods data looked very decent, but we'll need a bigger catalyst to move higher," said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.5 billion. "It would be nice to get one from Bernanke, but I don't think that's likely."

The Dow Jones industrial average <.DJI> was up 104.52 points, or 0.94 percent, at 11,281.28. The Standard & Poor's 500 Index <.SPX> rose 12.25 points, or 1.05 percent, at 1,174.60. The Nasdaq Composite Index <.IXIC> added 22.70 points, or 0.93 percent, at 2,468.76.

Bank of America Corp rose 8.5 percent to $6.83, reversing losses on Tuesday, when the Dow component hit a 2-1/2-year lows on fears it may have to raise massive amounts of capital. BofA shares remain down more than 30 percent so far this month. For details, see [ID:nN1E77M250]

Banks were the day's top risers, with the S&P financial index <.GSPF> up 2.4 percent. JPMorgan Chase & Co added 2.9 percent to $35.80.

In earnings news, Toll Brothers Inc reported third-quarter earnings that rose from the prior year but narrowed its home delivery order for the full year. The stock rose 4 percent to $15.36. [ID:nL4E7JO23N] (Editing by Jeffrey Benkoe)