REFILE-US STOCKS-China hopes, oil's jump end Wall St 5-day rout

(Refiles to fix grammar in headline)
* China optimism lifts energy, materials shares
* Market breaks 5-day loss
* But GE slides on finance arm worries
* Dow up 2.2 pct, S&P up 2.4 pct, Nasdaq up 2.5 pct
* For up-to-the-minute market news, click [STXNEWS/US]

(Adds details on financial stocks and volume)
By Leah Schnurr
NEW YORK, March 4 (Reuters) - U.S. stocks rallied on
Wednesday, ending a five-day losing streak, as another Chinese
stimulus package boosted commodity prices and encouraged
investors to jump into energy and natural resource shares.
News that China will increase spending on infrastructure
and manufacturing drove oil and metals prices higher, helping
to underpin the market after it hit a 12-year low a day
earlier. For more see [nSP488798]. Data also suggested
China's economy is recovering. [nPEK16693]
General Electric was among the few big names to end
the day lower. The economic bellwether fell 4.6 percent to
$6.69 for its fourth day of losses as investors worried its
ailing financial arm could threaten the whole company.
[nN04545769] GE has fallen 21 percent this week.
Dow component Caterpillar Inc , a big exporter to
China and a major seller of equipment to the miners, jumped
13.2 percent to $25.44.
"The market has been down so long and gone to levels that
a lot of investors thought were cheap or undervalued," said
Hugh Johnson, chief investment officer of Johnson Illington
Advisors in Albany, New York.
"All of the economies are interlinked, so if you can get
the first-biggest economy going, the U.S., and the
third-biggest economy going, China, then that alone will start
bank lending and an increase in the securitization."
The Dow Jones industrial average <.DJI> rose 149.82
points, or 2.23 percent, to 6,875.84. The Standard & Poor's
500 Index <.SPX> gained 16.54 points, or 2.38 percent, to
712.87. The Nasdaq Composite Index <.IXIC> jumped 32.73
points, or 2.48 percent, to 1,353.74.

FEAR BAROMETER DROPS
The day's rally is a modest one, however, compared with
declines of more than 21 percent since the beginning of the
year for the Dow and S&P. Analysts have said that without
stabilization in the financial and housing sectors -- the
heart of the economic crisis -- the economy will not be able
to improve.
"The market is extremely oversold, but with this dire news
hanging over everyone's head, it's tough to get anything
going," said Stephen Massocca, managing director at Wedbush
Morgan in San Francisco.
"It's hard to see how we can get going until this bank
mess gets cleaned up in any real way."
Wall Street's fear gauge, the CBOE Volatility Index, or
VIX,<.VIX>, fell 6.6 percent to 47.56, but it remained up more
than 6 percent through the past five days.
In a further effort to shore up the economy, the Obama
administration launched a $75 billion foreclosure relief plan
that enables struggling homeowners to modify loans even if
they are "under water." Even so, new data showed one in five
homeowners with mortgages owe more than their house is worth.
[nN04447661].
It was the latest in a slew of efforts to improve credit
markets, including Tuesday's program from the Federal Reserve
to spur consumer lending.

FINANCIALS STILL A WORRY
The financial group was the only one of the S&P's 10
sectors to finish lower, although it was off the day's lows
with the S&P financials index <.GSPF> down 0.8 percent.
Analysts said concerns over the fate of the struggling
financial sector remained. Besides GE, the Dow's other four
major decliners were all financials, with JPMorgan Chase
the biggest drag, down 8.1 percent at $19.30.
Oil prices in New York surged nearly 9 percent to
settle at $45.38 a barrel, while the Reuters-Jefferies CRB
<.CRB> index of 19 commodity futures jumped 3.8 percent.
Shares of Chevron rose 2.7 percent to $59.28,
while miner Freeport-McMoRan Copper & Gold Inc surged
13.4 percent to $32.21.
On Nasdaq, Apple gave the top boost, with a gain
of 3.2 percent to $91.17, while Intel Corp rose 3.9
percent to $12.76.
Trading was active on the New York Stock Exchange, with
about 1.80 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq,
about 2.36 billion shares traded, above last year's daily
average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
about 4 to 1, while on the Nasdaq, more than two stocks rose
for every one that fell.
(Additional reporting by Charlie Mikolajczak; Editing by Jan
Paschal)
((leah.schnurr@thomsonreuters.com; +1 646 223 6393; Reuters
Messaging: leah.schnurr.reuters.com@reuters.net))
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Keywords: MARKETS STOCKS

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