U.S. stocks climbed, following yesterday’s slump in the Standard & Poor’s 500 Index, as better- than-estimated data on housing starts added to expectations the world’s largest economy will weather Europe’s debt crisis.

PulteGroup Inc. (PHM) and Lennar Corp. rose more than 4.9 percent as builders broke ground on more houses than at any time in the past 19 months. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) added at least 2.7 percent, pacing gains in lenders. Jefferies Group Inc. (JEF) climbed 18 percent as the investment bank reported earnings that beat estimates. Sprint Nextel (S) Corp. rallied 2.3 percent as AT&T Inc. pulled its bid for T-Mobile USA.

The S&P 500 rose 2.4 percent to 1,234.36 at 11:42 a.m. New York time, as 490 out of 500 stocks gained. The gauge slumped 1.2 percent yesterday. The Dow Jones Industrial Average added 268.18 points, or 2.3 percent, to 12,034.44 today. The Russell 2000 Index of small companies rallied 3.6 percent to 733.90.

“The U.S. market is the most inviting on a global basis,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion, said in a telephone interview. “It’s a combination of being relatively inexpensive plus the fact that our economy is warming when Europe is going cold. When you look at the cumulative evidence, the housing report is one more brick in the wall and an important indication of strengthening.”

The S&P 500 fell 12 percent from a three-year high in April through yesterday amid concern about a global economic slowdown as Europe struggles to tame its debt crisis. It is trading for 13 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.

Housing Data

Stocks rose today after a Commerce Department report showed that housing starts increased 9.3 percent to a 685,000 annual rate, exceeding the highest estimate of economists surveyed by Bloomberg News and the highest level since April 2010. Building permits, a proxy for future construction, also climbed to a more than one-year high.

“It looks like our economy is doing pretty good despite the challenges of Europe,” said Michael Strauss, who helps oversee about $27 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. He spoke in a telephone interview. “We’re seeing better economic news and the housing report fits right in line with that. It’s another piece of news that’s helping the stock market.’’

The Morgan Stanley (MS) Cyclical Index of companies which tend to benefit the most from economic growth added 3.2 percent. The Dow Jones Transportation Average rose 3.1 percent.

Homebuilders Rally

A measure of homebuilders in S&P indexes jumped 5.3 percent as 11 of its 12 stocks gained. PulteGroup, the largest homebuilder by revenue, climbed 7.7 percent to $6.02. Lennar increased 4.9 percent to $19.41.

Financial companies rebounded today. JPMorgan advanced 3.4 percent to $31.75. The shares lost 3.7 percent yesterday. Bank of America, which yesterday ended at the lowest level since March 2009, gained 2.7 percent to $5.12.

Jefferies rallied 18 percent to $13.90. The investment bank that’s been fighting speculation about its financial strength rose after fiscal fourth-quarter profit beat estimates on a recovery in fixed-income trading. Jefferies may not have to raise more equity after reducing assets on its balance sheet, Sean Egan of Egan-Jones Ratings Co. said today on CNBC.

Commodity shares had the biggest gain in the S&P 500 among 10 industries, rising at least 3.5 percent. Alcoa Inc. (AA), the largest U.S. aluminum producer, increased 3.3 percent to $8.81. Schlumberger Ltd. (SLB), the world’s largest oilfield-services provider, climbed 4.6 percent to $68.04.

Higher Dividend

CVS Caremark Corp. rose 7.1 percent to $39.14. The largest U.S. distributor of prescription drugs boosted (CVS) its quarterly dividend to 16.25 cents a share from 12.5 cents a share.

Sprint Nextel jumped 2.3 percent to $2.21. AT&T failed to convince the Justice Department, which sued to block the transaction in August, that it could remedy the market impact of absorbing T-Mobile, the nation’s No. 4 mobile-phone operator. AT&T would have spent months in litigation to try to win court approval, and the company also faced possible opposition from the Federal Communications Commission. AT&T (T) gained 1.2 percent to $29.07.

Red Hat tumbled 8.6 percent to $42.09. Billings, a predictor of revenue, increased 23 percent from a year earlier in the period that ended Nov. 30. That was lower than the 24 percent growth projected by Walter Pritchard, an analyst at Citigroup Inc., according to a note yesterday.

Green Giant

General Mills Inc. (GIS) declined 2 percent to $38.81. The maker of Cheerios and Green Giant frozen vegetables reported second- quarter earnings excluding some items of 76 cents a share, missing the average analyst estimate of 79 cents a share.

Consumer stocks are defying this year’s drop in the S&P 500 regardless of their ties to the economy, and UBS AG says they will keep beating the market next year.

Makers of food, beverages and other consumer staples (S5CONS) in the S&P 500 gained (SPX) 7.1 percent as a group through yesterday. Their index was the year’s second-best (SPXL1) performer among the 10 main industry groups in the benchmark, and only trailed utilities. An index of retailers, media companies and other industries that rely on consumers’ discretionary index added 0.3 percent.

“The American consumer is alive and well and consumer companies are likely to post solid results in 2012,” Jonathan Golub, the chief U.S. market strategist at UBS, wrote yesterday in a report.