(Updates close with volume and advance/decline figures)

By Ellis Mnyandu

NEW YORK, May 6 (Reuters) - U.S. stocks rose on Tuesday as Fannie Mae's (FNM.N: Quote, Profile, Research) reassuring comments about the credit and housing markets buoyed financial shares, while record crude oil prices lifted shares of energy companies.

Speculation that Microsoft Corp (MSFT.O: Quote, Profile, Research) could resume takeover talks with Yahoo Inc (YHOO.O: Quote, Profile, Research) fed a rebound in technology shares. Yahoo gained 5.5 percent, while Microsoft rose 2.1 percent, leading the S&P 500's advance.

After an early retreat, the session turned positive when top executives of Fannie Mae, the largest U.S. home finance company, said the worst of the credit market turmoil erupting from the real estate slowdown may have passed. That mitigated earlier concern about its huge quarterly loss, and propelled a broad rally in financial stocks.

Fannie Mae climbed almost 9 percent, and smaller rival Freddie Mac (FRE.N: Quote, Profile, Research) gained 7.1 percent.

Oil struck above $122 a barrel for the first time, carrying energy shares higher with it and outweighing a retreat in sectors sensitive to high fuel costs, such as airlines and retailers.

"When I came to work today, we thought Fannie Mae's stock will be trading south of $25, but somehow the investing public got news that they had a pretty positive conference call," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore, Maryland.

"There's a lot of people that are eyeing the financials right now, so if you're going to play the financials, Fannie Mae and Freddie Mac have to be among them."