By Lynn Thomasson
July 27 (Bloomberg) -- U.S. stocks rebounded from the biggest declines since February and bank shares climbed from a 10-month low after a government report showed the economy grew at the fastest pace in more than a year last quarter.
Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the largest U.S. banks, advanced. Chevron Corp., the second-biggest U.S. oil company, gained after it said earnings rose as profit margins improved on gasoline and other fuels. Ford Motor Co. advanced on an upgrade by Merrill Lynch & Co. after the second-biggest U.S. automaker reported its first profit in eight quarters.
Stocks gained after the Commerce Department said the U.S. economy grew at a 3.4 percent annual pace in the second quarter, propelled by rising exports, commercial construction and government spending. Signs of strength in the economy helped stocks bounce back from a plunge caused by concern that takeovers will slow as money to pay for them grows scarcer.
The Standard & Poor's 500 Index climbed 2.64, or 0.2 percent, to 1485.3 at 10:17 a.m. in New York. The Dow Jones Industrial Average added 20.89, or 0.2 percent, to 13,494.46. The Nasdaq Composite Index climbed 5.06, or 0.2 percent, to 2604.4.
Chevron rose 32 cents to $87.78 after it said earnings rose 24 percent to $5.38 billion, or $2.52 a share, from $4.35 billion, or $1.97, a year earlier.
Ford added 18 cents to $8.27. The shares were upgraded to ``neutral'' from ``sell'' by analysts at Merrill Lynch & Co. after the company reported its first profit in eight quarters. The analysts said savings from restructuring in North America are progressing faster than they expected.
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