* Bernanke comments ease fears of nationalizing banks
* Fed stands behind viability of banks
* Dow up 3.3 pct; S&P 500 adds 4.0 pct; Nasdaq up 3.9 pct
* For up-to-the-minute market news, click []
(Adds context to Dow)
By Chuck Mikolajczak
NEW YORK, Feb 24 (Reuters) - U.S. stocks rose more than 3
percent on Tuesday to snap back from 12-year lows, after
Federal Reserve Chairman Ben Bernanke delivered a big dose of
relief when he signaled that nationalization of big banks was
not at hand.
Bernanke said the significant value built up in the
country's banks would be lost if they were government-owned,
easing investor fears that shareholders would be wiped out if
the banks were taken over.
In testimony to the U.S. Senate Banking Committee, Bernanke
added that although there could be a time when it is necessary
to close banks down, now is not the time. For more see
[].
Bank stocks surged a day after reports that the United
States was on the brink of taking a large common stock stake in
Citigroup Inc <C.N>. Citigroup on Tuesday jumped 21.5 percent
to $2.60. Bank of America <BAC.N> climbed 21 percent to $4.73
and the S&P Financial index <.GSPF> surged 11.4 percent.
"Bernanke's comments lifted spirits," said Hugh Johnson,
chief investment officer of Johnson Illington Advisors in
Albany, New York. "A real fear that investors have had is that
the public sector has become far too involved in the private
sector."
The Dow Jones industrial average <> rose 235.76 points,
or 3.31 percent, to 7,350.54. The Standard & Poor's 500 Index
<.SPX> gained 29.69 points, or 3.99 percent, to 773.02. The
Nasdaq Composite Index <> added 54.11 points, or 3.90
percent, to 1,441.83.
The Dow had its biggest point and percentage gain on
Tuesday since Jan. 21 but remains down 8.1 percent for the
month and 16.2 percent year-to-date.
The gains snapped a six-day losing streak for the S&P 500.
Concern about the future of the U.S. banking system had
dragged the Dow and the S&P 500 to 1997 lows on Monday.
Stocks rose across all sectors on Tuesday, with Microsoft
<MSFT.O> the only decliner among the 30 components of the Dow
industrials.
Shares of Home Depot <HD.N> rose over 10 percent to $20.67,
after the leading home improvement chain's quarterly operating
profit topped estimates. []
Exxon Mobil Corp <XOM.N> and Chevron <CVX.N> were the top
boosts to the Dow as crude oil futures <CLc1> rose nearly 4
percent. Exxon gained 4 percent to $72.09 and Chevron added 3.7
percent to $65.28. The price of crude rose amid expectations
that OPEC's oil supply will fall as the group's members enforce
a deal to cut output, increasing its scope to lower production
further at a March 15 meeting. []
The S&P energy index <.GSPE> gained 4.7 percent.
Investors also snapped up bargains in the technology
sector. Apple Inc <AAPL.O> rose 3.8 percent and Google Inc
<GOOG.O> gained 4.7 percent.
Shares of Microsoft, however, edged down 0.2 percent to
$17.17 after the software maker said at an analysts' meeting
there are no plans to accelerate cost cuts. []
Despite Tuesday's advance, U.S. stocks are at about half
their market value from peaks reached in October 2007.
Trading was active on the New York Stock Exchange, with
about 1.8 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq, about
2.35 billion shares traded, above last year's daily average of
2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
almost 6 to 1 while advancers beat decliners on the Nasdaq by
about 3 to 1.
(Editing by Leslie Adler)
