* GE says will keep dividend, shares jump 13 percent
* Financials, energy recover after Monday's rout
* Dow up 3 pct, S&P and Nasdaq up nearly 4 pct
* For up-to-the-minute market news, please click on
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(Updates to add volume, context in indexes)
By Chuck Mikolajczak
NEW YORK, Dec 2 (Reuters) - U.S. stocks snapped back on
Tuesday after a pledge by General Electric <GE.N>, a global
bellwether, to leave its dividend intact in a fragile economy
sparked optimism.
Financial stocks recovered a sizable chunk of Monday's
record loss after the Federal Reserve extended several
emergency measures integral to stabilizing banks during the
credit crisis.
The move by the U.S. central bank came a day after Fed
Chairman Ben Bernanke emphasized that policy-makers were
determined to stabilize the economy and financial markets.
The S&P financial index <.GSPF> rose nearly 8 percent, as
Citigroup <C.N> and Bank of America <BAC.N> both jumped nearly
12 percent.
But the spotlight was on conglomerate GE, whose shares
surged 13.6 percent to $17.61 after the maker of goods from jet
engines to lightbulbs said it plans to scale back its sizable
finance arm and cut jobs as the U.S. recession digs deeper,
while maintaining its dividend. For details, see
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"There's been concern about GE's defending its triple-A
credit rating at its financing unit. ... The company is taking
steps to bolster that unit, which will help protect its
dividend," said Brian Gendreau, an investment strategist in New
York for ING Investment Management Americas. "This is helping
to pull the market higher."
The Dow Jones industrial average <> gained 270.00
points, or 3.31 percent, at 8,419.09. The Standard & Poor's 500
Index <.SPX> rose 32.60 points, or 3.99 percent, at 848.81. The
Nasdaq Composite Index <> added 51.73 points, or 3.70
percent, at 1,449.80.
Energy stocks, currently the cheapest S&P sector in
relation to earnings, also drove the Dow higher after losses on
Monday. Chevron <CVX.N> gained almost 5 percent to $75.54 while
Exxon Mobil <XOM.N> climbed over 4 percent to $77.61.
Stocks pared gains and the Dow briefly turned negative
after General Motors <GM.N> reported U.S. vehicle sales
declined by 41 percent in November. []
The carmaker recovered to end up almost 6 percent at $4.85,
while Ford Motor Co <F.N> rose 6 percent to $2.70.
Executives of the big three U.S. automakers, including
Chrysler, are due to present Washington with their plans to
justify a $25 billion bailout as worries about possible
bankruptcy persist.
As part of its plan, Ford said it expected its overall and
North American automotive business to break even or be
profitable in 2011 and did not anticipate a liquidity crisis,
barring a bankruptcy of one of its domestic rivals.
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Even with the broad gains, worries about the deepening
economic slump caused some caution, as diversified manufacturer
3M Co <MMM.N> fell over 2.4 percent to $60.86 after a brokerage
downgrade.
Advancers outnumbered decliners by nearly 3 to 1 on the New
York Stock Exchange, while the ratio of advancers was more than
2 to 1 to decliners on the Nasdaq.
Volume totaled about 1.62 billion on the New York Stock
Exchange, while about 2.14 billion shares changed hands on the
Nasdaq.
(Editing by Leslie Adler)
