US STOCKS-Wall St up in volatile trade, Verizon lifts Dow

                                
 * Verizon's gain helps Dow climb in volatile trade
                                
 * Worry about recession's depth drags on tech
                                
 * Sept new home sales show surprise rise, help sentiment
                                
 * Hopes about Fed's bid to loosen up credit curbs losses
                                
 * Dow up 1.8 pct, S&P up almost 1 pct, Nasdaq up 0.7 pct
 (Updates to midday)
                                
 By Ellis Mnyandu
                                
 NEW YORK, Oct 27 (Reuters) - U.S. stocks advanced, with
the Dow climbing more than 1 percent in volatile trading at
midday on Monday as phone company Verizon Communications'
<VZ.N> solid profit helped the blue chips.
                                
 Market sentiment also got a boost from efforts by the U.S.
Federal Reserve to backstop the commercial paper market, which
should help loosen up credit.
                                
 The Dow Jones industrial average <.DJI> rose 148.15
points, or 1.77 percent, to 8,527.10. The Standard & Poor's
500 Index <.SPX> added 8.58 points, or 0.98 percent, to
885.35. The Nasdaq Composite Index <.IXIC> gained 10.76
points, or 0.69 percent, to 1,562.79.
                                
 Both the Dow and the S&P 500 have not violated their 2008
lows set Oct 10.
                                
 Last week, the Nasdaq briefly fell below its 2008 low,
also set Oct. 10, but has since edged back above it.
                                
 Shares of Verizon Communications <VZ.N> jumped 11.2
percent to $27.88 on the New York Stock Exchange and
contributed the most to the Dow's advance.
                                
 Among other leading gainers in the Dow industrials, 3M Co
<MMM.N> shares climbed 4.9 percent to $62.53, while
health-care company Johnson & Johnson <JNJ.N> added 2 percent
to $62.00.
                                
 The Fed announced on Oct. 7 a measure to increase the
supply of funds for many corporations that rely on selling
commercial paper to raise short-term money for their daily
operations. For details, see [ID:nN27310396]
                                
 But shares of Microsoft fell 2.1 percent to $21.50, making
the stock the top drag on Nasdaq after the Wall Street Journal
reported that defaults on tech financings -- loans that let
companies buy computers, software and other products -- have
spiked this year.
                                
 Shares of General Motors <GM.N> slid 4.2 percent to $5.70
on the New York Stock Exchange as investors fretted about the
carmaker's outlook after people familiar with the talks said
that GM and Chrysler LLC's owners, Cerberus Capital Management
[CBS.UL], were discussing a merger.
                                
 Shares of energy companies dropped on signs that a slowing
economy will hurt energy demand. ConocoPhillips <COP.N> shed
0.5 percent to $48.23 as U.S. crude oil futures <CLc1> slipped
below $64 a barrel.
                                
 Trading was volatile on Monday, with the three major
indexes moving rapidly between positive and negative
territory.
                                
 Earlier, U.S. stocks briefly turned higher following a
government report that showed a surprising increase in
September new home sales. For more see [ID:nN27319783]
                                
 Another positive spur came from comments by European
Central Bank President Jean-Claude Trichet that appeared to
open the door to another ECB interest-rate
cut.[ID:nFAE002606]
                                
 In Asia, Hong Kong shares <.HSI> on Monday plunged 12.7
percent, and Japan's Nikkei average <.N225> slid more than 6
percent to their lowest close in 26 years.