Updated from 11:18 a.m.

Shares of

KB Home

(KBH) - Get Report

surged 7% after the homebuilder reported blowout earnings of $182 million, or $2.06 a share, for the second quarter ended May 31, up from $102 million, or $1.20 a share, a year ago. Revenue grew to $2.13 billion from $1.57 billion a year earlier. Analysts had expected earnings of $1.78 a share on revenue of $2.16 billion. For 2005, KB raised its earnings forecast to $9 a share from its previous outlook of $7.88 a share. The stock closed up $5.05 to $77.30.

In other homebuilding news, Smith Barney raised its recommendation on

Beazer Homes USA

(BZH) - Get Report

,

Hovnanian Enterprises

(HOV) - Get Report

,

Meritage Homes

(MTH) - Get Report

,

Pulte

(PHM) - Get Report

,

Ryland Group

(RYL)

and KB to buy from hold. The firm said it believes the homebuilders will soon benefit from upward earnings revisions. Beazer soared $2.48 to $58.93; Hovnanian rose $2.15 to $66.22; Meritage gained $4.74 to $83.75; Pulte added $3.75 to $86; and Ryland stepped up $2.56 to $76.40.

Shares of

Host Marriott

(HMT)

added 1% after the company boosted its quarterly dividend to 10 cents from 8 cents. The dividend will be payable July 15 to shareholders of record June 30. The stock closed up 16 cents to $17.60.

Shares of

CRT Properties

(CRO)

rose 16% after the office building owner announced it has agreed to be acquired for $936.7 million by undisclosed clients advised by DRA Advisors. Under the agreement, CRT shareholders will receive $27.80 a share in cash, a 15.4% premium over Thursday's closing price of $24.09. The company also said it will pay a pro-rated dividend on its common stock through Sept. 30. Completion of the deal is expected to occur late in the third quarter. The stock was up $3.85 to $27.94.

Shares of

Nautilus

(NLS) - Get Report

slid 3% after the company agreed to acquire privately owned fitness apparel maker Pearl iZUMi USA for $68 million in cash. The deal is expected to be neutral to Nautilus' earnings in 2005 and is expected to add about 6 to 8 cents to 2006 per-share earnings. In 2004, the company generated sales of $49 million, according to the release. The deal is expected to close during the third quarter. The stock finished down 78 cents to $27.72.

Shares of

MGM Mirage

(MGM) - Get Report

traded down 1.9% after Merrill Lynch downgraded the casino company to neutral from buy, saying it sees limited upside for the stock after it hit the firm's $42 price target. The stock closed down a penny to $41.81.

NYSE

volume leaders included

General Electric

(GE) - Get Report

, up 39 cents to $36.50;

Pfizer

(PFE) - Get Report

, up 18 cents to $28.78;

Lucent

(LU)

, up 6 cents to $2.98; and

Exxon Mobil

(XOM) - Get Report

, up 77 cents to $60.89.

Nasdaq volume leaders included

Microsoft

(MSFT) - Get Report

, was flat at $25.04;

Cisco

(CSCO) - Get Report

,flat at $19.50;

Intel

(INTC) - Get Report

, up 10 cents to $23.22; and

Oracle

(ORCL) - Get Report

, down 12 cents to $12.34.