US STOCKS-Dow, S&P gain on Fannie, Freddie bailout

* Doubts on bailout's aid for housing, credit markets

* Banks, home builders higher, though off session peaks

* Nasdaq turns negative on semiconductors

* Lehman down on news meeting to sell asset management arm (Updates to afternoon, changes byline)

By Steven C. Johnson

NEW YORK, Sept 8 (Reuters) - The Dow and S&P 500 rose on Monday as investors bet Washington's bailout of U.S. home finance companies Fannie Mae (FNM.N) and Freddie Mac (FRE.N) will stabilize the housing market and ease the credit crisis.

U.S. stocks, however, were well off highs that had driven the Dow up as much as 350 points earlier, as doubts about the ability of the takeover to set the stage for an economic recovery cut into gains and weakness among technology shares pushed the Nasdaq into the red.

Investors poured into stocks worldwide after the U.S. government seized control of the two mortgage financiers in what could be among Washington's biggest bailouts ever. For more see [ID:nSP327680]

Financial shares, including Bank of America (BAC.N) and Citigroup (C.N), led gainers on the Dow and S&P on hopes that the government's move would help stabilize a slumping U.S. housing sector.