US STOCKS-Wall St jumps on data to mark best day in 8 weeks

                                

                                
 * Caterpillar to expand in Brazil, shares rise
                                
 * China, Australia data ease concerns on global economy
                                
 * Options action suggests investors wary of gains
                                
 * Dow up 2.5 pct, S&P 500 up 3 pct, Nasdaq up 3 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates to close)
                                
 By Rodrigo Campos
                                
 NEW YORK, Sept 1 (Reuters) - Wall Street posted its best
day in eight weeks on Wednesday as investor mood brightened
after better-than-expected factory data from the United States
and China.
                                
 Investors jumped on stocks across the market, with more
than six shares rising for every one that fell on the New York
Stock Exchange, while on the Nasdaq, nearly five stocks rose
for every one that fell. The broad Russell 3000 index <.RUA>
had 21 advancers for each declining stock.
                                
 Buying mostly came from momentum players and hedge funds,
according to Jason Weisberg, director of institutional trading
at Seaport Securities in New York. Traders said low volume
helped exaggerate gains due to aggressive bidding.
                                
 "They're moving the needle with force, but there's not a
lot of volume behind it. There's a bunch of people trying to
chase returns and this becomes a vicious game," Weisberg said.
                                
 Economically sensitive sectors like industrials and basic
materials posted large gains, after the Institute for Supply
Management showed U.S. factory activity grew faster than
forecast. The ISM report added fuel to a global equities rally
driven by strong overnight data out of China and Australia.
For details see [ID:nSGE68002V]
                                
 Heavy equipment maker Caterpillar Inc <CAT.N>, which is
sensitive to changes in economic sentiment, rose 4.6 percent
to $68.16. The Dow component said it will invest $180 million
over two years to expand manufacturing in Brazil, signaling
confidence in emerging markets. [ID:nN01118847]
                                
 Volume was subdued, but it was above some of the summer's
weakest readings. About 8.12 billion shares changing hands on
the New York Stock Exchange, the Nasdaq and the American Stock
Exchange, below last year's estimated daily average of 9.65
billion.
                                
 The Dow Jones industrial average <.DJI> rose 254.75
points, or 2.54 percent, to 10,269.47. The Standard & Poor's
500 Index <.SPX> added 30.96 points, or 2.95 percent, to
1,080.29. The Nasdaq Composite Index <.IXIC> gained 62.81
points, or 2.97 percent, to 2,176.84.
                                
 The S&P closed above its 14-day moving average for the
first time since Aug. 10, which could set 1,068 as a strong
short-term resistance level moving forward.
                                
 In the options market, puts outpaced calls in
exchange-traded funds that track the S&P 500 index and the
Nasdaq, suggesting investors are worried about the day's sharp
rally.
                                
 "This is typical of a big strong day like today. When
markets go up, people put on hedges as they fear that they
might see a pullback tomorrow," said Randy Frederick, director
of trading and derivatives at the Schwab Center for Financial
Research in Austin, Texas.
                                
 Puts outpaced calls by a ratio of 1.48 in the S&P 500 ETF
<SPY.P>, and by 1.23 in the tech-heavy PowerShares QQQ
<QQQQ.P>.
                                
 Apple Inc <AAPL.O> shot up 3 percent to $250.33, matching
the Nasdaq's gain for the day, after it introduced a new
version of Apple TV and a new iPod lineup. [ID:nN31268065].
                                
 The global economic data boosted U.S. oil futures by
nearly 3 percent to settle at $73.91 a barrel and lifted the
energy sector. The NYSE Arca Oil stock index <.XOI> rose 4.1
percent and the PHLX oil services index <.OSX> jumped 4.8
percent.
                                
 Metals prices also advanced on the data, lifting copper to
its highest level in more than four months. [ID:nLDE6800SB]
                                
 Freeport-McMoRan Copper & Gold Inc <FCX.N> climbed 5.9
percent to $76.19 and aluminum producer Alcoa Inc <AA.N>, a
Dow  component, gained 3 percent to $10.52.
                                
 Shares of Burger King Holdings Inc <BKC.N> shot up 14.7
percent to $18.86. The No. 2 U.S. hamburger chain may put
itself up for sale and has already talked with potential
buyers, a source said. [ID:nN01111786]
                                
 Ahead of the key payrolls data on Friday, investors
shrugged off a report from ADP Employer Services showing
private U.S. companies unexpectedly cut 10,000 jobs in August
as well as government data indicating U.S. construction
spending fell to its lowest rate in 10 years.
 (Reporting by Rodrigo Campos; Additional reporting by Angela
Moon; Editing by Jan Paschal)