US STOCKS-Wall St jumps as economic data boosts optimism

                                
 * Manufacturing, construction data better-than-expected
                                
 * GM, Citi removed from Dow index
                                
 * Consumer spending falls slightly less than expected
                                
 * Dow up 2.3 pct; S&P 500 up 2.5 pct; Nasdaq up 2.7 pct
                                
 * For up-to-the-minute market news click [STXNEWS/US]
 (Adds ISM, construction spending data, updates prices)
                                
 By Chuck Mikolajczak
                                
 NEW YORK, June 1 (Reuters) -  U.S. stocks rose sharply on
Monday as strong economic data bolstered optimism the worst of
the global recession was past, even as General Motors filed for
bankruptcy and was removed from the Dow industrial index.
                                
 A report from the Institute of Supply Management (ISM) on
U.S. manufacturing showed the sector contracted in May, but at
a slower rate than the prior month, indicating the sector is
gaining traction and could help an economic recovery. For
details, double-click [ID:nN01463669]
                                
 A government report showed U.S. construction spending in
April posted its biggest jump in eight months, and rose for the
second consecutive month. [ID:nN01456282]
                                
 Also, U.S. consumer spending fell in April, despite the
largest personal income increase in 11 months, government data
showed, although the decline was slightly less than expected by
analysts. [ID:nN29422420]
                                
 "(ISM) was better than expected, and I would put particular
emphasis on the new orders component, which broke above 50. In
my view, this is more evidence that we're getting closer to the
end of the recession," said Michael Darda, chief economist at
MKM Partners LLC in, Greenwich, Connecticut.
                                
 "This is one of the first reads we've had on the second
quarter, so I think it will dominate trading today."
                                
 Basic resources and energy stocks, seen benefiting from
economic growth, gained. Exxon Mobil Corp <XOM.N> rose 2.9
percent to $71.33 as the top boost to the Dow, while Alcoa Inc
<AA.N> added 5.5 percent to $9.72.
                                
 The Dow Jones industrial average <.DJI> jumped 195.86
points, or 2.30 percent, to 8,696.19. The Standard & Poor's 500
Index <.SPX> rose 23.09 points, or 2.51 percent, to 942.23. The
Nasdaq Composite Index <.IXIC> climbed 48.39 points, or 2.73
percent, to 1,822.72.
                                
 The latest U.S. economic numbers came after China's
manufacturing sector continued to expand moderately in May as
new export orders improved, two surveys showed, adding to
tentative signs the world's third-largest economy was
stabilizing. [ID:nPEK17043]
                                
 The positive numbers overshadowed news that General Motors
Corp <GM.N> and Citigroup Inc <C.N> will be removed from the
Dow Jones Industrial Average and be replaced by Cisco Systems
Inc <CSCO.O> and Travelers Cos Inc <TRV.N>, respectively, Dow
Jones Indexes said Monday. [ID:nN01457519]
                                
 GM filed for bankruptcy protection on Monday, forcing the
100-year-old company into a new and uncertain era of government
ownership. [ID:nN01398575]
                                
 Cisco was the top lift to the Nasdaq, rising 4.6 percent to
$19.36, while Travelers gained 4.2 percent to $42.38. GM shares
rose 18.7 percent to 88 cents, and Citigroup added 0.3 percent
to $3.73.
                                
 Since hitting a 12-year low in early March, the Dow has
gained nearly 33 percent and the S&P 500 is up more than 39
percent.
 (Reporting by Chuck Mikolajczak; additional reporting by Ryan
Vlastelica; editing by Jeffrey Benkoe)