* GDP, labor data points to improved economic strength
* Vodafone in talks with Verizon to sell out of venture
* Housing stocks rally, rebounding after recent decline
* Indexes up: Dow 0.3 pct, S&P 0.4 pct, Nasdaq 0.9 pct
By Ryan Vlastelica
NEW YORK, Aug 29 (Reuters) - U.S. stocks rose on Thursday as data pointed to better-than-expected economic growth while concerns over Syria receded as a potential Western military strike on the country appeared to be delayed for now.
The market’s gains were broad, with eight of the S&P 500’s 10 sectors in positive territory. Housing stocks were among the strongest of the day.
The U.S. economy expanded more quickly than expected in the second quarter, with the preliminary read on gross domestic product topping expectations. Separately, weekly jobless claims fell more than anticipated in the latest week, a possible sign that hiring improved in August.
The robust data could bolster the case for the Federal Reserve to soon wind down a major economic stimulus program that has driven a rally of more than 15 percent in the S&P 500 this year. Many market participants expect an announcement about scaling back the Fed’s asset purchases after its next policy meeting in mid-September.
The data “reiterates that the economy continues to grow, which is supportive to risk assets and bodes well for the prospect of future growth,” said Joe Tanious, global market strategist at J.P. Morgan Funds in New York.
“That the market is reacting positively to this shows that investors have become more comfortable with the idea of tapering.”
Recent market direction has been driven by geopolitical uncertainties related to Syria and a potential retaliation against the country’s government allegedly using chemical weapons on civilians. Over the past two sessions, the S&P has gained about 0.9 percent but remains down 1.1 percent for the week.
A military strike could be delayed, not only by the continued presence of U.N. weapons inspectors in Syria, but by the Obama administration’s efforts to coordinate with international partners and growing demands for consultation with U.S. lawmakers.
Despite that, analysts said the issue was the primary headwind facing markets.
“That there will be an attack is priced into markets, but there’s no way the market appreciates the implications beyond that if the U.S. were to go to war,” said Tanious, who helps oversee $1.5 trillion in assets. “It will create a lot of side effects the market isn’t aware of, with the impact on oil the main complication.”
Crude oil has spiked 3.3 percent this week on concerns that tensions in the Middle East will impact oil supplies. Brent crude is up 5 percent on the week, though both dipped modestly on Thursday.
The Dow Jones industrial average was up 43.09 points, or 0.29 percent, at 14,867.60. The Standard & Poor’s 500 Index was up 6.72 points, or 0.41 percent, at 1,641.68. The Nasdaq Composite Index was up 32.52 points, or 0.90 percent, at 3,625.86.
The S&P broke above its 100-day moving average of 1,638.98, a level that is viewed as an indication of near-term momentum. The benchmark index has closed below it for the past two sessions.
Homebuilding stocks were among the strongest of the day, rebounding after a period of recent weakness. Lennar Corp rose 3.3 percent to $32.66 while PulteGroup Inc was up 3.3 percent to $15.88 and D.R. Horton Inc gained 2.9 percent at $18.29. The PHLX Housing Sector Index climbed 1.7 percent but remains down 0.7 percent on the week.
U.S.-listed shares of Vodafone Group jumped 7.5 percent to $31.61 as the biggest percentage gainer on the Nasdaq 100 index, after the company said it was in talks with Verizon Communications to sell its 45 percent stake in their U.S. joint venture, Verizon Wireless.
Verizon rose 2.8 percent to $47.85 as one of the top boosts to the Dow.
US Airways Group Inc, American Airlines and the U.S. Justice Department said on Wednesday they were open to settling a court fight over whether the two companies should be allowed to merge. US Airways rose 5.6 percent to $16.20.
Guess Inc jumped 12 percent to $30.65 in the wake of second-quarter results that beat Wall Street estimates, bucking a trend of falling sales for apparel retailers.