(Updates to early afternoon, changes byline)
By Ellis Mnyandu
NEW YORK, March 24 (Reuters) - U.S. stocks soared on Monday
as a five-fold increase in JPMorgan Chase & Co's <JPM.N> offer
to buy Bear Stearns <BSC.N> reassured investors about financial
sector valuations and fresh data fueled hopes of a turnaround
in housing.
Investors warmed to the higher offer for Bear Stearns, to
about $10 a share, as it may avert a long shareholder battle
and let JPMorgan close the deal sooner.
The raised offer also helped quell valuation concerns since
the initial offer of $2 a share had been seen as suggesting
that financial shares had further to fall as banks grapple with
the impact of the credit crisis.
Investors snapped up financials, with shares of Citigroup
<C.N>, the largest U.S. bank by assets, up more than 6 percent,
while those of credit card and travel services company American
Express Co <AXP.N> climbed more than 4 percent to lead Dow
financials.
Bear Stearns shares more than doubled to $12.23, while the
S&P financial index <.GSPF> gained 2.2 percent.
"More writedowns are expected in the financial space but
people are starting to see a light at the end of the tunnel and
they suspect that it's not an oncoming train," said Peter
Kenny, managing director at Knight Equity Markets in Jersey
City, New Jersey. "At $2 a share for Bear Stearns, the question
was what were the rest of the financials worth?"
The Dow Jones industrial average <> jumped 213.78
points, or 1.73 percent, to 12,575.10. The Standard & Poor's
500 Index <.SPX> advanced 24.57 points, or 1.85 percent, to
1,354.08. The Nasdaq Composite Index <> rallied 71.13
points, or 3.15 percent, to 2,329.24.
Wall Street was on track for its first back-to-back advance
in the month of March.
Home builders were another standout after a report from the
National Association of Realtors showed a surprise jump in the
February pace of existing home sales in the United States. For
more see []. The Dow Jones home builder index
<.DJUSHB> shot up 5.8 percent.
Retailers also surged after upscale jeweler Tiffany & Co
<TIF.N> posted an unexpectedly high quarterly profit and
forecast robust growth in markets outside the United States and
Japan. The S&P retail index <.RLX> was up 3.3 percent.
Tiffany shares were up 11.9 percent at $43.21 on the NYSE.
Citigroup shares rose to $23.94 on the New York Stock
Exchange, while those of American Express jumped 4.3 percent to
$48.01. Among home builders, shares of Toll Brothers <TOL.N>, a
luxury home builder, climbed 5.7 percent to $24.41.
Technology shares also shone, with semiconductor stocks
among the biggest gainers following positive broker action by
Lehman Brothers on shares of such companies as Analog Devices
Inc <ADI.N>, whose stock jumped 4.6 percent to $29.65.
Lehman also raised its rating on Fairchild Semiconductor
International <FCS.N>, Intersil Corp <ISIL.O> and Microsemi
Corp <MSCC.O> to "overweight" from "equal weight."
Fairchild shares were up 7 percent at $11.90 on the NYSE,
Intersil climbed 5 percent to $26.64 on the Nasdaq, while
Microsemi advanced 3.8 percent to $23.75.
Shares of Apple Inc <AAPL.O>, maker of the iPod, climbed
4.4 percent to $139.15, making the stock the top gainer on the
Nasdaq.
(Editing by James Dalgleish)
