ANALYSTS' VIEWS: JPMorgan buys stricken Bear Stearns

LONDON (Reuters) - JPMorgan Chase has bought stricken rival Bear Stearns for a rock-bottom $2 a share, while the U.S. Federal Reserve has expanded lending to securities firms for the first time since the Great Depression.

The shock weekend news sent European shares tumbling in Monday's early trade, with investors rattled by fears of contagion.

The following are analysts' comments on the moves.

SANFORD BERNSTEIN, ANALYST BRAD HINTZ, NEW YORK

"Despite Bernstein's price targets, which imply an average of 44 percent upside potential over the next six to twelve months, we would NOT recommend getting into the large capitalization names at this time.

"The unfortunate events at Bear Stearns will lead to sharply increasing funding pressure on the other four large capitalization brokers (Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley) in the near term. And although these four companies have strong capital bases and capable corporate treasuries and repo desks, investing in the brokers now is a bet on a recovery of confidence in credit markets that are experiencing the worst turmoil in several decades."

MF GLOBAL, ANALYST SIMON MAUGHAN, LONDON

"If you get a crisis of confidence in the wholesale banking space and something the size of Bear Stearns could go under, then people start to panic. You get a real fear factor.

What happens to the investment banking model? If you lose confidence in that kind of situation, the business model collapses.