US STOCKS-Wall St rises on US efforts to jump-start economy

                                
 * U.S. efforts to jump-start economy boost optimism
                                
 * Home builders' stocks up after mortgage data, Fed move
                                
 * Nasdaq outpaces Dow, S&P helped by tech companies
                                
 * Dow up 1.2 pct, S&P 500 up 1.1 pct, Nasdaq up 1.4 pct
                                
 * For up to the minute market news, please click on
[STXNEWS/US].
 (Updates to midday)
                                
 By Deepa Seetharaman
                                
 NEW YORK, Dec 31 (Reuters) - U.S. stocks rose on Wednesday
as Wall Street neared the end of its worst year since the Great
Depression, with equities bolstered for the second straight day
on bets that fresh initiatives from Washington will help stave
off a deep recession.
                                
 Late on Tuesday, the U.S. Federal Reserve added details on
its plan to drive down mortgage costs and set a goal of buying
$500 billion in mortgage-backed securities by mid-2009, a move
that surprised analysts in its speed. For details, see
[ID:nN30607943]
                                
 The move came a day after lawmakers gave an additional $6
billion to General Motors Corp <GM.N> and its financing arm,
GMAC, in an effort to stabilize the auto industry, one of the
country's biggest employers.
                                
 While 2008 has been a brutal year for global markets,
investors' hopes are rising going into 2009 with the
inauguration of President-elect Barack Obama.
                                
 "There is general optimism that the new administration will
come forth with some policies that are going to help," said
Peter Jankovskis, director of research at OakBrook Investments
LLC in Lisle, Illinois.
                                
 The Dow Jones industrial average <.DJI> rose 103.86 points,
or 1.20 percent, at 8,772.25, and the Standard & Poor's 500
Index <.SPX> jumped 10.01 points, or 1.12 percent, at 900.65.
The Nasdaq Composite Index <.IXIC> gained 21.32 points, or 1.37
percent, at 1,572.02.
                                
 Still, the S&P looks set to end 2008 down about 40 percent
for the year, although it has recovered about 18 percent since
scraping an 11-year low on Nov. 20.
                                
 The Nasdaq on Wednesday was bolstered by large-cap tech
companies that are seen as more suited to survive in a harsh
economic environment. Qualcomm Inc <QCOM.O>, the wireless chip
maker, was up 3.3 percent to $36.09, while Apple Inc <AAPL.O>
rose 1.1 percent to $87.27.
                                
 Industrials led the S&P 500, including Pall Corp <PLL.N>,
Fluor Corp <FLR.N> and Dow component Caterpillar Inc <CAT.N>.
                                
 Pall, a maker of filtration products, jumped 9 percent to
$28.37, and engineering and construction company Fluor leaped
4.4 percent to $46.09. Caterpillar, the heavy equipment maker,
rose 3 percent to $44.95.
                                
 Housing was another bright spot. Interest rates on U.S.
30-year fixed-rate mortgages dropped for a ninth consecutive
week and fell to their lowest level since 1971, according to a
survey released by home funding company Freddie Mac.
[ID:nN31245632].
                                
 Demand for U.S. mortgage applications held at the highest
level in more than five years during the Christmas holiday week
with loan rates near record lows, an industry group said on
Wednesday.
                                
 The Dow Jones U.S. Home Builders index <.DJUSHB> was up 2.4
percent after the data, led by luxury home builder Toll
Brothers <TOL.N>, up 3 percent to $21.22.
                                
 The last economic data point of 2008 showed a sharp drop in
the number of workers filing claims for jobless benefits,
although the Labor Department said it was likely due to
seasonal factors and warned the labor market remains soft.
[ID:nN31350153]
 (Editing by Leslie Adler)