US STOCKS-Wall Street rallies on strong economic data; tech in focus

* Stocks gain on strong outlook for earnings, economy
* Honeywell down on aerospace unit revenue miss
* Pinterest up as Credit Suisse raises price target
* Indexes up: Dow 0.7%, S&P 500 1.2%, Nasdaq 1.6%

(Adds mid-afternoon prices)
By Herbert Lash
April 23 (Reuters) - U.S. stocks rose in a broad rally on
Friday as increased factory output and housing data supported
expectations of a swift economic recovery，while big tech stocks
rose in anticipation of strong earnings reports next week.
The bounceback follows a sell-off on Thursday when reports
that U.S. President Joe Biden plans to almost double the capital
gains tax spooked some investors. Analysts dismissed the
sell-off as a knee-jerk reaction, saying equities are poised for
new highs.
The broad-based S&P 500 .SPX rose more than 1%, trading
just below what would be a new record close, while the
tech-heavy Nasdaq .IXIC scored a bigger percentage gain.
Earnings take center stage next week when 40% of the S&P
500's market cap report on Tuesday through Thursday, including
the tech heavyweights of Microsoft Corp MSFT.O , Google parent
Alphabet Inc GOOGL.O , Apple Inc AAPL.O and Facebook Inc
FB.O .
Those names, including Amazon.com Inc AMZN.O , supplied the
biggest upside to a rally where advancing shares easily outpaced
decliners.
Companies are providing guidance after staying quiet during
the pandemic, while lower bond yields and results that beat
estimates are driving the rally, said Tim Ghriskey, chief
investment strategist at Inverness Counsel in New York.
"There is a lot of anticipation of what's to come," he said.
"We've seen actual reports beating these very high expectations.
Yields have come back down, which is very positive for tech."
First-quarter earnings are expected to increase 33.9% from a
year ago, the highest quarterly rate since the fourth quarter of
2010, according to IBES Refinitiv data.
U.S. factory activity powered ahead in early April. IHS
Markit's flash U.S. manufacturing PMI increased to 60.6 in the
first half of this month, the highest reading since the series
started in May 2007. In another sign of strong consumer demand, sales of new U.S.
single-family homes rebounded more than expected in March,
likely boosted by an acute shortage of previously owned houses
on the market. All the 11 major S&P 500 sectors were higher, with
technology .SPLRCT and financials .SPSY leading gains.
Ron Temple, head of U.S. equity at Lazard Asset Management,
said the U.S. economy is about to post the strongest growth in
the past 50 years, with more than 6% gains both this year and
next. The Federal Reserve, meanwhile, will allow the economy to
run hotter than in the past, adding to the high-growth outlook.
"Investors are gradually coming around to the sheer
magnitude of excess savings, pent-up demand and the implications
of such a massive wave of fiscal stimulus," Temple said.
The S&P 500 .SPX gained 1.16% at 4,182.88, and the Dow
Jones Industrial Average .DJI rose 0.69% to 34,047.78. The
Nasdaq Composite .IXIC added 1.56% at 14,034.01.
Earnings reports in the day were lackluster, with American
Express Co AXP.N sliding 2.1% after reporting a slump in
credit spending and lower quarterly revenue. Honeywell International HON.N fell 2.0% after it missed
revenue expectations for its aerospace division, its biggest
business segment.
Naked Brand Group NAKD.O , jumped 5.9% after shareholders
approved the proposed divestiture of the company's Bendon
brick-and-mortar operations. Image sharing company Pinterest Inc PINS.N gained 2.6% as
Credit Suisse raised its price target, saying its newer product
offerings and expanding footprint in markets abroad will yield
higher revenue and user growth. Advancing issues outnumbered declining ones on the NYSE by a
3.65-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favored advancers.
The S&P 500 posted 71 new 52-week highs and no new lows; the
Nasdaq Composite recorded 94 new highs and 20 new lows.