* G20 to pump $1 trillion into the economy
* Regulator relaxes accounting rules for banks
* Factory orders rise in February
* Dow and S&P each up 3.5 pct, Nasdaq gains 3.9 pct
* For up-to-the-minute market news click []
(Updates to midday, changes byline)
By Rodrigo Campos
NEW YORK, April 2 (Reuters) - U.S. stocks jumped 4 percent
on Thursday after world leaders agreed to pump an additional
trillion dollars into the economy to fight the financial
crisis and on rule changes aimed at giving banks flexibility
when dealing with toxic assets.
Leaders of the G20 announced an additional $500 billion
for the International Monetary Fund, plus $250 billion in IMF
Special Drawing Rights and $250 billion to boost trade, to
fight the worst economic crisis since the 1930s. For details
see []
Adding to the positive tone, shares of large manufacturers
such as Caterpillar Inc <CAT.N> rose on hopes the economy may
be stabilizing. Government data showed U.S. factory orders
rose in February for the first time in seven months.
Financial shares, a key driver of the recent rally, surged
on bets for an improving global economy and relaxation of
accounting rules that have resulted in sharp hits to their
balance sheets. []
Shares of Bank of America <BAC.N> climbed 4.3 percent to
$7.35 while Citigroup <C.N> rose 1.9 percent to $2.73. The KBW
Bank index <.BKX> advanced 2.5 percent.
"Simply put," the accounting rule change "has the
potential to take some of the volatility out of the financial
services' income statements," said Craig Peckham, equity
trading strategist at Jefferies & Company in New York.
"That has been one of the elements that's made it hard to
own financials over the last year."
The Dow Jones industrial average <> gained 271.04
points, or 3.49 percent, to 8,032.64, after earlier climbing
to a session high of 8,075.73. The Standard & Poor's 500 Index
<.SPX> jumped 28.52 points, or 3.52 percent, to 839.60, near a
session high of 845.61. The Nasdaq Composite Index <>
rallied 60.02 points, or 3.87 percent, to 1,611.62, after
earlier rising as high as 1623.34.
Thursday's rally helped the S&P 500 rise nearly 25 percent
from 12-year lows reached early last month and cut its
year-to-date losses to around 7 percent.
The Nasdaq is now up more than 2 percent for the year.
The industrial sector was among the top gainers in a
broad-based rally, as U.S. data showed new orders received by
factories rose 1.8 percent in February after a 3.5 percent
drop in January, breaking a six-month streak of declines and
boosting hopes the economy may be starting to climb out of
recession. [].
Shares of construction, mining and forestry machinery
manufacturer Caterpillar jumped 9 percent to $31.61 while
aerospace technology provider United Technologies Corp <UTX.N>
climbed 5.6 percent to $46.33.
"People woke up and looked at the body of economic data
that's come out over the last 24 hours, and people are
starting to feel like we may be seeing the early stages of the
turn," Peckham added.
Shares of IBM <IBM.N> traded above $100 for the first time
since early October and were the top boost to the Dow
industrials.
Chevron <CVX.N> gave another boost to the blue-chip Dow
industrials, up 3.7 percent at $70.85 as crude oil futures
<CLc1> shot up 8 percent, or $3.87, to $52.26 a barrel on
optimism for an economic recovery.
Shares of General Motors <GM.N> surged nearly 10 percent
to $2.12 a day after executives said March auto sales pointed
to the "first signs of brightening" in the auto industry.
[]
(Additional reporting by Leah Schnurr; Editing by Jan
Paschal)
