* Geithner says banks capitalized enough to keep lending
* United Technologies sees signs of stabilization
* Broadcom offers to buy Emulex
* Dow up 1.6 pct, S&P 500 up 2.1 pct, Nasdaq up 2.2 pct
* For up-to-the-minute market news click []
(Updates to close)
By Leah Schnurr
NEW YORK, April 21 (Reuters) - U.S. stocks rose on Tuesday
after Treasury Secretary Timothy Geithner indicated most banks
have sufficient reserves to protect against possible losses,
sparking a rebound in bank shares.
Earnings from a handful of blue-chip companies also boosted
sentiment, led by United Technologies Corp <UTX.N> as the
industrial bellwether forecast a return to growth next year.
JPMorgan Chase & Co <JPM.N> shares charged more than 9
percent higher and were the leader on the Dow, a day after
worries that government stress tests would reveal deep flaws in
bank balance sheets dragged stocks to their biggest loss since
March 5.
"There was concern that the stress tests might indicate
that a lot of the banks needed additional capital but his
comment was that the majority of banks are adequately
capitalized," said Bucky Hellwig, senior vice president at
Morgan Asset Management, in Birmingham, Alabama.
The Dow Jones industrial average <> rose 127.83 points,
or 1.63 percent, to 7,969.56. The Standard & Poor's 500 Index
<.SPX> gained 17.69 points, or 2.13 percent, to 850.08. The
Nasdaq Composite Index <> was up 35.64 points, or 2.22
percent, at 1,643.85.
Financials were the best-performing sector in the broad S&P
500 index <.SPX> after Geithner said most U.S. banks have
enough capital to keep lending, but bad debts are slowing a
recovery. (For details, see []).
The earnings season saw one of its biggest days yet with
five blue-chips reporting. On the downside, Merck & Co Inc
<MRK.N> and Coca-Cola Co <KO.N> were the Dow's biggest drags
after both companies said sales were feeling the effects of the
global slowdown.
Merck was down 6.7 percent at $23.54, while Coke fell 2.8
percent to $43.09.
The technology sector saw another day of merger activity
after chipmaker Broadcom Corp <BRCM.O> made an unsolicited bid
to buy Emulex Corp <ELX.N>, a maker of storage equipment. On
Monday, Oracle Corp <ORCL.O> said it would buy Sun Microsystems
Inc <JAVA.O>.
"A lot of the technology companies have pristine balance
sheets and lots of cash, so it makes sense to make strategic
acquisitions at this point in time, so when the cycle does turn
they'll have a competitive advantage that has been enhanced,"
said Hellwig.
Emulex surged 46.8 percent to $9.70, while Broadcom fell
5.8 percent at $20.52.
Shares of United Tech, the world's largest maker of
elevators and air conditioners, rose 4.8 percent to $47.99
after the company beat profit expectations and said that
although order rates remained down, there were signs of
stabilization, especially in China. []
The KBW bank index <.BKX> climbed 8.1 percent, reversing
earlier declines after Geithner's testimony. JPMorgan jumped
9.6 percent to $32.53 and Wells Fargo & Co <WFC.N> gained 10.7
percent to $18.81. The Obama administration has said results of
the stress tests on banks' capital levels will be released on
May 4.
Citigroup Inc <C.N> jumped 10.2 percent to $3.24 after
Chief Executive Vikram Pandit said he expects the bank to
rebound from its current woes and repay "every dollar" it owes
the U.S. government. [].
The S&P reclaimed about half of Monday's loss, which had
thrown a speedbump into the market's impressive six-week rally.
The broad index is up more than 25 percent from the early March
bear market low.
(Editing by Leslie Adler)
