* Consumer confidence posts biggest jump in 6 years

* Morgan Stanley upgrades Apple

* Dow up 2.4 pct; S&P up 2.6 pct, Nasdaq up 3.5 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates with GM bondholders shunning offer)

By Caroline Valetkevitch

NEW YORK, May 26 (Reuters) - U.S. stocks climbed more than 2 percent on Tuesday as data showing the biggest monthly jump in consumer confidence in six years lifted hopes of an economic rebound, and a brokerage upgrade of Apple Inc drove sharp gains on the Nasdaq.

Apple's (AAPL.O: Quote, Profile, Research) shares closed nearly 7 percent higher after Morgan Stanley said the iPhone will drive strong earnings growth over the next two years and raised its price target on the stock. For details, see [IDnBNG62341]

An index of U.S. consumer confidence surged in May, strongly topping expectations as it registered the biggest monthly jump since April 2003, according to the Conference Board, an industry group. [ID:nN26489555]

Consumer discretionary shares were among the top gainers on the Dow and S&P 500, with McDonald's Corp (MCD.N: Quote, Profile, Research) up 3.1 percent, retailer Macy's Inc (M.N: Quote, Profile, Research) up 5.9 percent and the S&P consumer discretionary index up 3.8 percent.