Market participants were dealt another dose of disappointing data, but stocks worked their way higher and eventually benefited from a late-session squeeze that helped them book their first gain in five sessions.

Stocks fell almost 4% during the course of the four previous sessions, but the early tone among traders suggested that they would continue to trend lower. The interest to sell stemmed partly from renewed weakness overseas. Europe's bourses initially overcame news that Ireland's sovereign debt rating was reduced to AA- from AA at Standard & Poor's, but they eventually rolled over. The Shanghai Composite dropped 2.0% and Japan's Nikkei sank deeper into bear market territory, even though the yen eased off of the 15-year best that it booked in the prior session. Recent export data added to concerns about the implications of the yen's strength. Amid those concerns, it was reported that Japan's Ministry of Finance might consider unilateral yen-selling intervention.

Disappointment over the latest durable goods orders data added to the negative tone of premarket trade. Overall durable goods orders for July increased just 0.3%, which is far less than the 3.0% increase that had been widely expected. Excluding transportation, durable goods orders dropped 3.8%, which contrasts sharply with the 0.5% increase that many had forecasted. The prior month's orders were revised upward to reflect a 0.1% decline in total orders and a 0.2% increase in orders less transportation.

Sellers intensified their efforts when new home sales numbers for July were released shortly after the open. New home sales dropped 12.4% month-over-month to an annualized rate of 276,000 units, which is well below the rate of 334,000 units that had been widely expected.

Near-term support levels were violated and stocks set fresh monthly lows amid the knee-jerk selling that ensued, but the major indices were quick to rebound. That bounce spurred some short covering, which squeezed stocks even higher.

Shares of home improvement retailers and homebuilders saw some of the sharpest moves. They swung to gains of 2.1% and 3.8%, respectively, as big bets against the space ahead of the dour housing data had to be covered.

YAHOO [BRIEFING.COM]: While the broader market's gain was rather modest, the Nasdaq staged a strong advance. It was led by large-cap tech plays like Apple (AAPL 242.89, +2.96) and Google (GOOG 454.62, +3.23).

Biotech also provided support to the Nasdaq. Biotech stocks advanced 1.5%, but managed care providers were the strongest performers within the health care sector. Managed care stocks climbed 2.5%.

Treasuries were strong in the early going, such that yields on dropped to new annual lows. However, Treasuries retreated as the stock market climbed. Results from an auction of 5-year Notes didn't help. The auction drew a bid-to-cover of 2.8 and dollar demand of $101.9 billion. Both measures were down from the prior auction.

Oil prices started the session in the red, but rallied right along with stocks in afternoon trade. The climb helped the commodity close with a 1.2% gain at $72.52 per barrel. Oil's advance came in the face of some rather bearish inventory data, which showed a build of 4.11 million barrels when a build of just 300,000 barrels had been expected.

Natural gas failed to follow its fellow energy component. Instead, natural gas prices closed pit trade with a 4.2% loss at $3.87 per MMBtu. Prices probed new multimonth lows.

Gold put together a solid gain. The precious metal advanced 0.6% to close trade in the commodities pits at $1241.30 per ounce, which marks its best close since the beginning of July.

Silver prices spiked 3.5% to settle at $19.03 per ounce. It has been almost two months since the metal saw prices above $19 per ounce.

Despite strength in precious metals and a rally by oil, the CRB Commodity Index still slid to a 0.3% loss. It has fallen for six straight sessions and logged losses in 13 of the past 15 sessions so that it is down 4.6% month-to-date.

Advancing Sectors: Consumer Discretionary (+1.0%), Health Care (+1.0%), Telecom (+0.6%), Tech (+0.5%), Materials (+0.3%), Financials (+0.3%), Consumer Staples (+0.1%)
Declining Sectors: Energy (-0.3%), Utilities (-0.3%), Industrials (-0.2%)DJ30 +19.61 NASDAQ +17.78 NQ100 +0.9% R2K +1.6% SP400 +0.8% SP500 +3.46 NASDAQ Adv/Vol/Dec 1676/2.02 bln/977 NYSE Adv/Vol/Dec 1832/1.11 bln/1167