Bloomberg U.S. Stocks Rise, Dow Jumps Most Since February; Goldman Gains

May 3 (Bloomberg) -- U.S. stocks surged, with the Dow Jones Industrial Average rising the most since February, as Warren Buffett defended Goldman Sachs Group Inc., manufacturing grew at the fastest pace since 2004 and personal spending increased.

Goldman Sachs rebounded 3 percent after Buffett said the bank shouldn’t be blamed for losses on mortgage bets at the center of a Securities and Exchange Commission fraud lawsuit. United Airlines parent UAL Corp. and Continental Airlines Inc. climbed more than 2 percent after agreeing to combine. Apple Inc. advanced 2 percent after saying it sold 1 million iPads in the first month of the tablet computer’s release.

The Standard & Poor’s 500 Index advanced 1.3 percent to 1,202.26 at 4 p.m. in New York, its best gain since March 5. The Dow jumped 143.22 points, or 1.3 percent, to 11,151.83, its biggest advance since Feb. 16. Seven stocks rose for every two falling on U.S. exchanges. The Chicago Board Options Exchange Volatility Index, the benchmark gauge of U.S. options known as the VIX, slid 8.4 percent to 20.19.

“The economy is showing improvement,” said Peter Jankovskis, who helps manage about $1.8 billion as co-chief investment officer at Oakbrook Investments in Lisle, Illinois. “And we continue to see mergers. Also Warren Buffett’s comments on Goldman Sachs show that he’s doing a very responsible thing by not piling on pre-judging the situation.” more...