* Banks rise after Wells Fargo preliminary results
* Wal-Mart reports lower March sales, higher EPS view
* Textron soars on report of buy-out offer
* Dow up 2.2 pct, S&P up 2.5 pct, Nasdaq up 2.9 pct
* For up-to-the-minute market news click []
(Updates to midday, changes byline)
By Edward Krudy
NEW YORK, April 9 (Reuters) - U.S. stocks rallied on
Thursday as Wells Fargo <WFC.N> gave preliminary first-quarter
results that were stronger than expected, providing a ray of
hope in the struggling financial sector.
Wells Fargo shares jumped 20.7 percent to $17.97 after the
bank said it expects to report a record $3 billion in net
income for the first quarter. For more, see []
In addition, a source familiar with talks told Reuters
U.S. officials will not look to close any banks based on the
results of "stress tests" being conducted to determine how the
largest U.S. banks would fare under more adverse economic
conditions.[]. The news backed up an earlier media
report.
The state of banks has been a key factor behind the stock
market's sentiment. The current rally from early March began
when several banks reported a reassuring start to the year.
Shares of JP Morgan Chase <JPM.N> rose 11.7 percent to
$30.65, making it the Dow's top performer, while Bank of
America <BAC.N> surged 20.8 percent to $8.53. The KBW Bank
index <.BKX>jumped 10.8 percent. The index is on track for its
longest weekly winning streak since the fall of 2006.
"The market is reacting to the lifting of guidance from
Wells Fargo this morning," said Fred Dickson, market
strategist and director of retail research at D.A. Davidson &
Co in Lake Oswego, Oregon.
"We're in a market that is hungry for what I call rays of
sunshine or glimmers of hopes on company fundamentals and
economics."
But he added: "It is still going to remain a bank-to-bank
issue. I don't think one can generalize and make a blanket
statement that all the bank results are going to be slightly
better than what is currently expected."
The Dow Jones industrial average <> climbed 172.67
158.58 points, or 2.20 percent, to 8,009.78. The Standard &
Poor's 500 Index <.SPX> rose 20.93 points, or 2.54 percent, to
846.09. The Nasdaq Composite Index <> shot up 46.79
points, or 2.94 percent, to 1,637.45.
An S&P index of retailers' stocks <.RLX> rose 3.3 percent,
helped by better-than-expected same-store sales at department
stores such as Macy's Inc <M.N>, up 11.4 percent at $11.50.
In contrast, the stock of Dow component Wal-Mart Stores
Inc <WMT.N> fell 4.4 percent to $50.32 after the company
reported a lower-than-expected 1.4 percent increase in March
sales at U.S. stores open at least a year. But the discount
retailer also forecast quarterly earnings at the high end of
its previous view. [].
Apple Inc <AAPL.O>led the Nasdaq higher, rising 2.5
percent to $119.21 after Credit Suisse lifted its price target
on the stock to $133 from $120.
On the merger front, shares of Textron Inc <TXT.N>, the
top percentage gainer on NYSE, skyrocketed almost 50 percent
to $13.64 after a Kuwaiti newspaper reported that a consortium
of Middle Eastern companies was looking to buy the diversified
U.S. manufacturer. Textron declined to comment.
At its current pace, the S&P 500 will advance for the
fifth consecutive week and is up more than 25 percent since
the 12-year closing low reached on March 9.
U.S. markets are closed tomorrow for the Good Friday
holiday.
(Editing by Jan Paschal)
