31.05.201306:54:40UTC+00Wall Street ends up on optimism Fed stimulus to remain

Stocks rose rebounding from the previous session's losses, as tepid economic data eased concerns the Federal Reserve would begin to gradually scale back its policy of stimulating growth.

The day's gain put the S&P 500 on track to end the month about 3.6 percent higher, while the Dow was up 3.3 percent for the month so far. The Nasdaq was up 4.9 percent.

"It won't be until around September before we really hear about possible changes in Fed (policy), but the market is volatile because at these levels, profit-taking is part of a hedging method to protect against possible downsides," said Randy Frederick, director of trading and derivatives at Charles Schwab in Austin, Texas.

"After the profit-taking, the market moves right back up because it's a great buying opportunity, like today."

The Dow Jones industrial average was up 21.73 points, or 0.14 percent, at 15,324.53. The Standard & Poor's 500 Index was up 6.05 points, or 0.37 percent, at 1,654.41. The Nasdaq Composite Index was up 23.78 points, or 0.69 percent, at 3,491.30.

Loose monetary policies by central banks around the world have helped drive both the Dow and the S&P 500 to record highs. The S&P 500 is up more than 16 percent this year so far.

Even if U.S. economic data signals strength, "the stock market has yet to fully embrace the notion that the economy has reached take-off velocity and is ready to contend with a removal of stimulus," said Andrew Wilkinson, chief economic strategist Miller Tabak & Co in New York.

Pending home sales rose 0.3 percent in April to the highest since April 2010, but analysts had expected a 1.1 percent rise.

In company news, Costco Wholesale Corp, the largest U.S. warehouse club chain, reported third-quarter earnings that beat expectations by a penny, though sales were below forecasts. Shares fell 0.9 percent to $111.88.

Semiconductors were higher after chipmaker Avago Technologies forecast current-quarter revenue largely above expectations. Avago shares jumped 9.8 percent to $37.82 while the PHLX semiconductor index .SOX climbed 1.5 percent.

NV Energy Inc surged 22.5 percent to $23.62 after a unit of Berkshire Hathaway Inc. agreed to buy the electric utility for $5.6 billion. Berkshire class B shares rose 1.6 percent to $114.84.