* Consumer confidence posts biggest jump in 6 years
* Morgan Stanley upgrades Apple
* Dow up 2.4 pct; S&P up 2.6 pct, Nasdaq up 3.5 pct
* For up-to-the-minute market news click []
(Updates with GM bondholders shunning offer)
By Caroline Valetkevitch
NEW YORK, May 26 (Reuters) - U.S. stocks climbed more than
2 percent on Tuesday as data showing the biggest monthly jump
in consumer confidence in six years lifted hopes of an economic
rebound, and a brokerage upgrade of Apple Inc drove sharp gains
on the Nasdaq.
Apple's <AAPL.O> shares closed nearly 7 percent higher
after Morgan Stanley said the iPhone will drive strong earnings
growth over the next two years and raised its price target on
the stock. For details, see []
An index of U.S. consumer confidence surged in May,
strongly topping expectations as it registered the biggest
monthly jump since April 2003, according to the Conference
Board, an industry group. []
Consumer discretionary shares were among the top gainers on
the Dow and S&P 500, with McDonald's Corp <MCD.N> up 3.1
percent, retailer Macy's Inc <M.N> up 5.9 percent and the S&P
consumer discretionary index <.GSPD> up 3.8 percent.
"Today the market is celebrating the return of some sign of
consumer confidence," said Peter Kenny, managing director at
Knight Equity Markets in Jersey City, New Jersey. "It was so
strong, even the dismal housing numbers couldn't" bring the
market down.
The news influenced the broad market, but consumer
discretionary, restaurants and even Apple shares received the
biggest boost, he said. "It's all the same script," Kenny
said.
Other data on Tuesday showed prices of single-family homes
fell in March from a year earlier. The pace of decline,
however, slowed for a second consecutive month.
[].
The Dow Jones industrial average <> rose 196.17 points,
or 2.37 percent, to finish at 8,473.49. The Standard & Poor's
500 Index <.SPX> was up 23.33 points, or 2.63 percent, at
910.33. The Nasdaq Composite Index <> was up 58.42 points,
or 3.45 percent, at 1,750.43.
Consumer spending accounts for roughly two-thirds of the
U.S. economy. The U.S. confidence data followed similarly rosy
consumer reports in Germany and France.
The data also seemed to outweigh geopolitical concerns over
North Korea's latest nuclear and missile tests [],
which pressured stocks at the open.
The market's gains came after four straight days of losses
that marked the Dow's longest losing streak since the five days
ended March 3. Worries about a possible cut to the United
States' credit rating on Friday had pressured stocks.
On the Nasdaq, Apple shares gained 6.8 percent to close at
$130.78. On the New York Stock Exchange, McDonald's shares were
up 3.1 percent at $58.84 and Macy's shares were up 5.9 percent
at $11.85.
Shares of General Motors Corp <GM.N> closed up a penny at
$1.44 after news the automaker had failed to persuade
bondholders to accept a debt-for-equity offer, setting the
stage for the largest-ever U.S. industrial bankruptcy within
days.
Homebuilder DR Horton's <DHI.N> shares rose 5.1 percent to
$9.47.
Trading was active on the New York Stock Exchange, with
about 1.38 billion shares changing hands, below last year's
estimated daily average of 1.49 billion, while on Nasdaq, about
2.11 billion shares traded, below last year's daily average of
2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
5 to 1 while advancers beat decliners on the Nasdaq by about 7
to 2.
(Editing by Leslie Adler)
