China hopes, oil's jump end Wall St 5-day rout

By Leah Schnurr

NEW YORK (Reuters) - Stocks rallied on Wednesday, ending a five-day losing streak, as another Chinese stimulus package boosted commodity prices and encouraged investors to jump into energy and natural resource shares.

News that China will increase spending on infrastructure and manufacturing drove oil and metals prices higher, helping to underpin the market after it hit a 12-year low a day earlier. Data also suggested China's economy is recovering.

General Electric (GE.N) was among the few big names to end the day lower. The economic bellwether fell 4.6 percent to $6.69 for its fourth day of losses as investors worried its ailing financial arm could threaten the whole company. GE has fallen 21 percent this week.

Dow component Caterpillar Inc (CAT.N), a big exporter to China and a major seller of equipment to the miners, jumped 13.2 percent to $25.44.

"The market has been down so long and gone to levels that a lot of investors thought were cheap or undervalued," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

"All of the economies are interlinked, so if you can get the first-biggest economy going, the U.S., and the third-biggest economy going, China, then that alone will start bank lending and an increase in the securitization."

The Dow Jones industrial average .DJI rose 149.82 points, or 2.23 percent, to 6,875.84. The Standard & Poor's 500 Index .SPX gained 16.54 points, or 2.38 percent, to 712.87. The Nasdaq Composite Index .IXIC jumped 32.73 points, or 2.48 percent, to 1,353.74.

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