US STOCKS-Dow, S&P climb on banks; Tech weighs on Nasdaq

                                
 * Banks rise after stress tests results
                                
 * Job cuts less than expected; unemployment rises
                                
 * Tech pulls Nasdaq lower
                                
 * Dow up 0.9 pct, S&P up 0.9 pct, Nasdaq off 0.1 pct
                                
 * For up-to-the-minute market news click [STXNEWS/US]
                                
 (Updates to midmorning)
                                
 By Chuck Mikolajczak
                                
 NEW YORK, May 8 (Reuters) -  The Dow and S&P 500 rose on
Friday after the government's stress tests results on big banks
lifted optimism on financial stocks, and data showed employers
cut a smaller-than-expected amount of jobs in April.
                                
 But the Nasdaq fell slightly on a slide in chipmakers and
other technology bellwethers, including Apple Inc <AAPL.O>,
which dropped 1.8 percent to $126.70. Nevertheless, the Nasdaq
remains on pace for its ninth straight weekly advance.
                                
 U.S. regulators told top banks after the close on Thursday
to raise $74.6 billion to build a capital cushion that
officials hope will restore faith in financial firms and set a
course out of the deepest recession in decades. For details,
see [ID:nN07333426]
                                
 Several of the large banks have announced equity and debt
offerings in an attempt to raise capital.
                                
 The 539,000 job cuts by employers in April was the smallest
reduction since October, and hinted at some improvement in the
labor market, but the unemployment rate soared to 8.9 percent,
the highest since September 1983. [ID:nN07416806]
                                
 "They were assuming some very aggressive, sort of
draconian, scenarios, and with things appearing to be a little
on the mend maybe we might not see things get that bad," said
Kevin Kruszenski, head of Listed Trading at KeyBanc Capital
Markets in Cleveland.
                                
 "At some point the banks are going to work again."
                                
 The Dow Jones industrial average <.DJI> gained 75.83
points, or 0.90 percent, to 8,485.68. The Standard & Poor's 500
Index <.SPX> added 8.34 points, or 0.92 percent, to 915.73. The
Nasdaq Composite Index <.IXIC> dropped 0.90 points, or 0.05
percent, to 1,715.34.
                                
 Shares of several major banks rose, with JPMorgan Chase Inc
 <JPM.N> and Bank of America Corp <BAC.N>  each up more than 3
percent.
                                
 The KBW Bank index <.BKX> jumped 5.4 percent.
                                
 Bank of America Chief Executive Kenneth Lewis said in an
interview on CNBC that he anticipates about $10 billion in
asset sales and that he is "pretty confident" the bank will do
better than the stress test results indicate.
                                
 McDonald's Corp <MCD.N> shares rose 3.2 percent to $55.10
and was one of the top boosts to the Dow after the fast-food
restaurant said global comparable sales rose 6.9 percent for
April, with a 6.1 percent rise in U.S. comparable sales.
[ID:nN08480433]
                                
 A rise in crude oil rose to nearly $58 a barrel lifted
energy shares, as Chevron <CVX.N> gained 2.5 percent to $69.65
while Exxon Mobil <XOM.N> added 1.7 percent to $70.12.
                                
 Even with the slight decline, the Nasdaq remains on pace
for its ninth straight weekly advance, the longest such streak
for the index since an 11-week advance at the end of 1999.
                                
 Since hitting a 12-year closing low in March, the S&P has
surged 35 percent, driven by optimism about the financial
systems's condition and hopes the recession may be waning.
  (Reporting by Chuck Mikolajczak, additional reporting by Ryan
Vlastelica; Editing by Padraic Cassidy)