US STOCKS-Hopes for bank accounting rule fix lift Wall St

                                
 * Talk of key accounting rule change lifts sentiment
                                
 * Wal-Mart leads Dow; Apple, Akamai shine on Nasdaq
                                
 * Dow rises 1.3 pct; S&P 500 up 1.6 pct; Nasdaq up 2 pct
                                
 * For up-to-the-minute market news, click [STXNEWS/US]
 (Updates to close, changes byline)
                                
 By Ellis Mnyandu
                                
 NEW YORK, Feb 5 (Reuters) - U.S. stocks rallied  on
Thursday on investor hopes that the government's plan to shore
up the financial system will include a change in accounting
rules that would stem bank write-downs and spur lending.
                                
 Bank stocks reversed losses in late morning to lift the Dow
off its lowest level since the bear market low of Nov. 21.
                                
 Bank of America <BAC.N> finished up 3 percent, while
JPMorgan <JPM.N> rose 2.1 percent and the S&P financial index
<.GSPF> rose 1.4 percent. A solid January sales report from
Wal-Mart <WMT.N>, coupled with better-than-expected reports
from a few other retailers added to the positive tone.
                                
 "Anything that helps the banks is helpful for the economy
if they can start lending," said Giri Cherukuri, head trader at
OakBrook Investments LLC, which oversees $1.3 billion in Lisle,
Illinois. "Wal-Mart news was good, so that also helped."
                                
 The Dow Jones industrial average <.DJI> rose 106.41 points,
or 1.34 percent, to 8,063.07. The Standard & Poor's 500 Index
<.SPX> gained 13.62 points, or 1.64 percent, to 845.85. The
Nasdaq Composite Index <.IXIC> climbed 31.19 points, or 2.06
percent, to 1,546.24.
                                
 The S&P 500 is now off 6.4 percent since the start of 2009,
but has risen 12.4 percent since the bear market low hit in
November.
                                
 Investor sentiment was buoyed by talk that Washington would
suspend an accounting requirement on the recognition of losses
that has resulted in billions of write-downs for banks.
                                
 The Obama administration is due to announce its bank rescue
plan next week.
                                
 There was also encouraging news on the earnings front on
Thursday.
                                
 Akamai Technologies Inc <AKAM.O> ,whose technology helps
companies run websites and online businesses, posted a
quarterly profit and revenue above Wall Street expectations,
sending its shares up 18.1 percent to $16.73 on Nasdaq.
[ID:nN04313574]
                                
 Investors also snapped up shares of technology bellwethers,
including Apple <AAPL.O> and Cisco Systems <CSCO.O>, as a
loosening up of lending would boost both consumer and business
spending. Apple added 3.1 percent to $96.46 to become the
Nasdaq's top boost, while Cisco rose 3.2 percent to $16.35
after initial disappointment with the company's revenue outlook
for the current quarter dissipated.
                                
 Wal-Mart was the top boost to the Dow, jumping 4.6 percent
to $48.56 on the New York Stock Exchange after the discounter
posted solid January sales.
                                
 Among bank stocks, JPMorgan shares rose 2.1 percent to
$24.54, while Bank of America <BAC.N> , which earlier had
fallen more than 10 percent to its lowest level since 1984,
ended up 3 percent at $4.84.
                                
 The KBW bank index <.BKX> was up 1.8 percent, after earlier
having been as much as 6.8 percent lower.
                                
 Even with Thursday's rise, financial shares are down 28
percent so far this year.
                                
 Companies in the basic materials sector rose on higher
metals prices, with aluminum producer Alcoa Inc <AA.N> up 3.1
percent to $8.06. Miner Freeport McMoRan <FCX.N> jumped 3.9
percent to $28.35.
 (Editing by Leslie Adler)