US STOCKS-Insurers, retailers lift Wall St; Berkshire rating cut

* Some life insurers qualify for TARP funds
* Bed Bath & Beyond up after results beat expectations
* Dow up 0.6 pct, S&P up 1.2 pct, Nasdaq up 1.9 pct
* For up-to-the-minute market news click [STXNEWS/US]

(Adds credit downgrade of Berkshire Hathaway after the bell)
By Leah Schnurr
NEW YORK, April 8 (Reuters) - U.S. stocks snapped a two-
day slide on Wednesday on news the government is shoring up
life insurers and optimism about consumer spending after Bed
Bath & Beyond Inc reported a better-than-expected
profit.
Life insurers, whose capital base has been eroded by
falling markets, have met requirements for government funds,
the U.S. Treasury said. The news lifted shares of insurance
companies, including Prudential Financial , which was
up nearly 8 percent. For more see [nN08522342]
But in the latest sign of the economic downturn's impact,
Moody's Investors Service stripped Warren Buffett's Berkshire
Hathaway of its top rating of Aaa after the
closing bell, citing the recession and the severe decline in
stocks. [nN08633004].
The Nasdaq surged nearly 2 percent on hopes that a
recovery in business spending will boost tech profits and
after Bed Bath & Beyond jumped 24.3 percent to $31.70
on sales that were not as bad as feared in the last quarter.
"The mood is improving that maybe the economy will come
back sometime, and both consumer discretionary and tech are
cyclical," said Al Goldman, chief market strategist at
Wachovia Securities in St. Louis.
The Dow Jones industrial average <.DJI> added 47.55
points, or 0.61 percent, to 7,837.11. The Standard & Poor's
500 Index <.SPX> gained 9.61 points, or 1.18 percent, to
825.16. The Nasdaq Composite Index <.IXIC> shot up 29.05
points, or 1.86 percent, to 1,590.66.

FEAR BAROMETER FALLS
Meager volume marked the session again, but in a sign that
investors are becoming less fearful, the CBOE Volatility Index
<.VIX>, or VIX, closed at its lowest level since early
January. The VIX fell 3.8 percent to end at 38.85.
Stocks cut gains and the Dow briefly turned negative after
minutes from the Fed's most recent meeting showed the Federal
Reserve's policy-makers lowered projections for real gross
domestic product in the second half of the year and 2010,
reviving worries about the U.S. economy's health.
In Washington, securities regulators voted to seek public
comment on five proposals to curb short selling, which critics
have blamed for deepening the financial crisis.
[nN08529569].
Analysts said market reaction was muted as the proposals
had been expected. They noted that Wall Street remained
divided over the effectiveness of potentially bringing back
the uptick rule.

CENTEX AND QUALCOMM CLIMB
In the home builders' sector, Pulte Homes said it
would buy Centex Corp for $1.3 billion in stock in a
deal that would create the largest U.S. home builder. Centex
jumped 18.9 percent to $9.06, while Pulte tumbled 10.5 percent
to $9.64.
Among insurers, Prudential climbed 7.7 percent to $23.81
and Lincoln National jumped 32.8 percent to $9.15. The
Dow Jones life insurers'index <.DJUSIL> gained 6.3 percent.
On the tech front, Qualcomm was among the
Nasdaq's biggest advancers, gaining 2.2 percent to $40.22,
while International Business Machines , up 2.5 percent
at $101.19, underpinned the Dow. Technology stocks have held
up relatively well despite the market's drop to 12-year lows
last month.
"As you look across the broader equity marketplace, one of
the things we are seeing is some people trying to really chase
after the so-called earlier cycle names and it's been building
as the days have gone on," said Craig Peckham, equity trading
strategist at Jefferies & Company in New York.
Since hitting 12-year closing lows in early March, the
broad S&P 500 is up nearly 22 percent after a month-long rally
that was sparked by hopes that the economic slump is
moderating and positive comments from some major banks.
Volume was modest on the New York Stock Exchange, where
about 1.32 billion shares changed hands, below last year's
average daily volume of 1.49 billion. On the Nasdaq, about
1.86 billion shares traded, below last year's average daily
volume of 2.28 billion.
Advancers outnumbered decliners on the NYSE by a ratio of
about 3 to 1, while on the Nasdaq, more than two stocks rose
for every one that fell.
(Additional reporting by Edward Krudy; Editing by Jan
Paschal)
((leah.schnurr@thomsonreuters.com; +1 646 223 6393; Reuters
Messaging: leah.schnurr.reuters.com@reuters.net))
((Multimedia versions of Reuters Top News are now available
for: * 3000 Xtra: visit http://topnews.session.rservices.com
* BridgeStation: view story .134
For more information on Top News:
http://topnews.reuters.com))

Keywords: MARKETS STOCKS

==============================================================
To access running updates on what's moving U.S. stocks double
click on [STXNEWS/US]
==============================================================
For other U.S. market data and news, click on codes in
brackets:
U.S. Equities speed guide........................
S&P 500 index ........................................<.SPX>
Dow Jones industrial average..........................<.DJI>
Nasdaq Composite index...............................<.IXIC>
Nasdaq 100............................................<.NDX>
Russell 2000 small cap................................<.RUT>
S&P major sectors..............................<0#.GSPMAJOR>
NYSE most active.....................................<.AV.N>
Nasdaq most active...................................<.AV.O>
Top NYSE pct gainers.................................<.PG.N>
Top NYSE pct losers..................................<.PL.N>
Top Nasdaq pct gainers...............................<.PG.O>
Top Nasdaq pct losers................................<.PL.O>
52 week highs:
NYSE............... Nasdaq..............
52 week lows:
NYSE............... Nasdaq..............

Main global stock indexes and market reports:
FTSE Eurotop 300 .....<.FTEU3> European report .......[.EU]
Nikkei 225.............<.N225> Tokyo report............[.T]
FTSE 100...............<.FTSE> London report...........[.L]
Xetra DAX.............<.GDAXI> Frankfurt market stories[.F]
CAC-40.................<.FCHI> Paris market stories...[.PA]
World Indices.....................................<0#.INDEX>
Reuters survey of world bourse outlook.........
U.S. IPO diary........................................[IPO/]
U.S. Asset Allocation Table.......................[US/ASSET]

More Reuters News on equities at a glance:
Equities ............[E] US company news.........[TOP/EQU]

Key non-equities market reports:
Foreign exchange......................................[FRX/]
Oil....................................................[O/R]
US Treasuries.........................................[US/N]
International bonds...................................[EUB/]
Gold.......................................[GOL/X] or [GOL/]
CRB index of commodity futures........................[CRB/]

(C) Reuters 2009. All rights reserved. Republication or redistribution of
Reuters content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Reuters. Reuters and the Reuters
sphere logo are registered trademarks and trademarks of the Reuters group of
companies around the world.

nN08369685
.N .N/C