* Texas Instruments, P&G boost outlooks
* Monsanto tumbles as 2010 forecast below Street views
* Dow, S&P up 0.5 pct, Nasdaq up 0.6 pct (Updates to early afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Sept 10 (Reuters) - U.S. stocks rose on Thursday as a brighter outlook from consumer product company Procter & Gamble and a successful Treasury debt auction put Wall Street on pace for a fifth straight session of gains.
Procter & Gamble was the Dow's biggest lift, climbing 3.7 percent to $55.77, after it affirmed its earnings forecast for the current quarter and said sales would improve in the next quarter.
A third straight strong Treasury auction relieved concerns about the U.S. government's ability to fund its deficit.
The sale of $12 billion of 30-year bonds "shows the U.S. ability to finance the deficit and its budget in light of the supply and ... the weak dollar. That is why stocks are trading up," said Peter Boockvar, managing director and equity strategist at Miller Tabak & Co.
The potential for rising retail sales was encouraging for investors, who view consumer spending as a critical component to an economic recovery.
Optimism was contained, however, by a 5.6 percent drop to $78.79 for Monsanto after the world's biggest seed company forecast fiscal 2010 earnings below Wall Street's estimates. The S&P materials index shed 0.1 percent.
"This is just kind of a holding pattern," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland. "We've had an advance, we've drifted higher, volume in August was very light, so it's hard to put too much credence into the move.
The Dow Jones industrial average gained 46.78 points, or 0.49 percent, to 9,594.00. The Standard & Poor's 500 Index rose 4.85 points, or 0.47 percent, to 1,038.22. The Nasdaq Composite Index climbed 11.70 points, or 0.57 percent, to 2,072.09.
Chip companies Texas Instruments and ASMLboth boosted their sales outlooks in a signal consumers are spending cash on personal technology and helped lift the PHLX semiconductor index 1 percent.
"Now you are going to have to see a follow-through in not only economic data, but in companies' earnings and commentary along those lines," Kruszenski said.
If the market maintains its gains, it would mark five consecutive advances and push the S&P 500 index to its highest level in nearly a year.
Health insurance stocks rose 2.5 percent after analysts said President Barack Obama's speech urging Congress to act on health care reform contained nothing unexpected and indicated a government-run insurance option opposed by the industry was less likely to pass.
Cigna Corp rose 4.4 percent to $30.70 and Humana Inc gained 3.1 percent at $39.23.
Yahoo Inc added 3.9 percent to $15.35 after Banc of America Securities-Merrill Lynch Research upgraded the company, saying growth in user traffic continues to outpace growth in the Internet as a whole.
U.S. traded shares of ASML rose 1.4 percent although Texas Instruments shares slipped 0.3 percent to $25.06.
Airlines stocks added 6 percent after J.P. Morgan said fundamentals for the U.S. airlines sector are on the mend, and upgraded UAL Corp and U.S. Airways Group Inc.
United airlines parent UAL Corp shares jumped 12.6 percent to $4.03 while U.S. Airways shares surged 17.5 percent to $7.58. (Editing by Kenneth Barry)