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Stocks open higher following home building report

Steve Rothwell

NEW YORK (AP) -- Stocks opened higher after a government report showed that U.S. builders started more houses and apartments in February, boosting optimism that the housing market recovery is maintaining its momentum.

The Dow Jones industrial average rose 48 points, or 0.3 percent, to 14,499, as of 10:08 a.m. EDT. The Standard & Poor's 500 gained three points, or 0.2 percent, to 1,556 and the Nasdaq composite rose 10 points, or 0.2 percent, to 3,247 points.

Builders broke ground on homes last month at a seasonally adjusted annual rate of 917,000, up from 910,000 in January. That's the second-fastest pace since June 2008, behind December's pace of 982,000. Building permits, a sign of future construction, increased 4.6 percent to 946,000.

Homebuilders rose, with PulteGroup advancing 50 cents to $21.25 and Beazer Homes climbing 50 cents to $17.

Stocks in Europe edged lower again today after slumping yesterday on a plan to give bank deposits in Cyprus a haircut to help fund the European country's bailout. That sparked fear of a bank run in the Mediterranean island nation and among the 16 other countries that use the euro.

U.S. stocks have been on a roll this year.

The Dow has advanced 10.3 percent and broke through its previous all-time high on March 5, this year on optimism that the housing market is gathering momentum and hiring is starting to pick up. Strong company earnings and continuing stimulus from the Federal Reserve is also helping boost demand for stocks.

The Federal Reserve will open its second meeting of the year Tuesday and on Wednesday will issue a policy statement and update its economic forecasts.

Economists don't expect the Fed to let up in its drive to keep stimulating the economy.

The yield on the 10-year Treasury note, which moves inversely to its price, fell to 1.93 percent from 1.96 percent.

Among other stocks making big moves:

— Lululemon fell $3.58 to $62.26 after the company yanked its popular black yoga pants from store shelves after it found that the sheer material used was revealing too much of its loyal customers.

— Walgreen rose $2.76 to $45.19 after the drugstore chain said its fiscal second-quarter earnings climbed 11 percent, helped by contributions from European health and beauty retailer Alliance Boots, a business sale gain, and its new contract with Express Scripts Holding Co.

— Citigroup rose 67 cents to $46.91 after it said that it agreed to pay $730 million to settle a class-action lawsuit that claimed investors were misled by the bank's disclosures when they purchased its debt and preferred stock.

— Electronic Arts fell 83 cents to $17.87 after the video games maker said late Monday that its adjusted revenue fell 28 percent to $1.18 billion for the last three months of 2012. The figure was below Wall Street's expectations of $1.29 billion. The company also said that its CEO, John Riccitiello, will step down on March 30.