U.S. stocks up and bonds down on upbeat credit view

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks jumped and bond prices tumbled on Monday as fears over the global credit crisis eased as JP Morgan (JPM.N) boosted its bid for troubled investment bank Bear Stearns and U.S. existing home sales climbed.

The price of the benchmark 10-year U.S. Treasury bond made its biggest single day drop in four years as the stock rally that began last week continued to draw funds away from the safe-haven yields of government debt.

The dollar firmed on the view that signs of a recovery in the battered U.S. housing market could reduce the need for U.S. interest rate cuts, drawing funds to higher-yielding currencies.

Oil fell again, extending a slide from last week's record to 10 percent on the stronger dollar and lingering worries over slowing energy demand.

Trading volume on most markets was thin as financial exchanges in Europe and parts of Asia remained closed after the Easter weekend.

The crisis that has gripped financial markets for months remained the centre of attention. JPMorgan Chase & Co (JPM.N) raised its all-stock offer for Bear Stearns Cos BSC.N to about $10 (5 pounds) a share, compared with $2 last week, and struck a deal to buy nearly 40 percent of the bank.

The Federal Reserve Bank of New York backed the deal, with support from the U.S. Treasury Department, with $29 billion in special financing. The New York Fed will also take control of a $30 billion portfolio of Bear's hard to sell assets.

In Europe, Prime Minister Gordon Brown and French President Nicolas Sarkozy will urge banks this week to make "full and immediate disclosure" of write-offs due to the global credit crisis, British officials said.