US STOCKS-Banks leap on stress test relief, energy up

                                
 * Banks gain on view shortfalls less than expected
                                
 * Private-sector job losses lower than expected
                                
 * Dow, S&P 500 up; Nasdaq slips
                                
 * For up-to-the-minute market news click [STXNEWS/US]
 (Updates to late afternoon, changes byline)
                                
 By Ellis Mnyandu
                                
 NEW YORK, May 6 (Reuters) - The Dow and S&P 500 rose on
Wednesday, led by bank shares, after media reports suggesting
some major banks, including JP Morgan Chase & Co <JPM.N>, won't
have to raise capital under government stress tests.
                                
 But a drag from profit-taking in technology shares pushed
the Nasdaq slightly lower.
                                
 The broad market rose on energy shares, which reacted to
higher oil prices. U.S. crude <CLc1> climbed nearly 5 percent
to $56.26 a barrel.
                                
 The stress test results are due to be release on Thursday.
The rally in bank stocks was widespread, with Citigroup <C.N>
jumping more than 17 percent to $3.89, Bank of America <BAC.N>
up 16.8 percent to $12.67 and JPMorgan gaining 5.4 percent to
$3.69.
                                
 The KBW Bank index <.BKX> shot up 12 percent, bolstering
the broader market's recovery from 12-year lows hit in early
March.
                                
 If three-fourths or even half of the banks pass the test,
then the government can focus on the few remaining banks that
need federal help, said Phil Orlando, chief equity market
strategist at Federated Investors in New York.
                                
 "In my mind, at least, it just means we're getting that
much closer to a resolution," Orlando said.
                                
 The Dow Jones industrial average <.DJI> rose 62 points, or
0.8 percent, to 8,472. The Standard & Poor's 500 Index <.SPX>
gained 10 points, or 1.2 percent, to 914. The Nasdaq Composite
Index <.IXIC> slipped 4 points, or 0.26 percent, to 1,750.
                                
 The test results will cover 19 major U.S. financial
institutions. The Wall Street Journal reported that JPMorgan,
the No. 2 U.S. bank, does not need more capital under the U.S.
government stress test.
                                
 Other news reports suggested the capital shortfalls for
Citigroup and others might be less than expected.
                                
 Bloomberg reported that Citigroup's requirement under the
stress tests is about $5 billion, citing people with knowledge
of the bank's test results. Wells Fargo & Co <WFC.N> , whose
shares were up 12.6 percent to $26.15, was said to require
capital of about $15 billion.
                                
 In economic news, the total number of U.S. private-sector
job losses were much less than expected in April, hitting the
lowest level since November last year, according to a report by
ADP Employer Services.
                                
 Since hitting a closing low in early March, the S&P 500 has
surged 35 percent, driven by optimism about the financial
system's condition and hopes the recession may be waning.
 (Reporting by Ellis Mnyandu; Editing by Kenneth Barry)