NEW YORK -- Shares of Hovnanian Enterprises rose sharply Friday as rumors swirled that Warren Buffett's Berkshire Hathaway Inc. would buy an interest in the struggling home builder.

"There is talk that Warren Buffett is buying a stake in Hovnanian," said Jon Najarian, co-founder of optionmonster.com "We think such a move by Buffett would clearly signal a bottom is finally in or near this battered housing sector."

Hovnanian shares were up 9.3 percent near noon at $18.09 on the New York Stock Exchange after rising as much as 14 percent earlier in the session. Hovnanian shares were among the top percent gainers on the New York Stock Exchange.

That helped other home-builder shares climb. Standard Pacific Corp shares were up nearly 4 percent, rising 70 cents, to $18.24. Shares of KB Home were up 3.2 percent, or $1.15, to $37.34.

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"That's what's driving it and of course many of these stocks are heavily shorted so any type of rumors gets the shorts to immediately start covering," Jim Wilson, JMP Securities analyst said.

The Dow Jones U.S. Home Construction Index, a yardstick that measures home builder performance, rose 3 percent.

Buffett was not immediately available for comment. His assistant, Debbie Bosanek, declined to comment, saying Berkshire does not discuss what it is buying or selling except when required.

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