May 29, 2012 / 2:47 PM / 7 years ago

US STOCKS-Wall St up on China stimulus hopes as euro zone steadies

* Greek polls point to pro-bailout parties

* Spanish bank worry continues

* Vertex Pharma plunges after data correction

* Indexes up: Dow 1.1 pct, S&P 1.2 pct, Nasdaq 1.4 pct (Updates to open)

By Chuck Mikolajczak

NEW YORK, May 29 (Reuters) - U.S. stocks rallied on Tuesday, with each of the major indexes up more than 1 percent, on hopes China may unleash more spending measures and Greek election polls pointing to support for pro-bailout parties.

The official Shanghai Securities News reported on Tuesday, citing unidentified sources, that China’s biggest banks appeared to have accelerated lending toward the end of this month as Beijing starts to fast-track its approval of infrastructure investments in an effort to stem sagging growth.

Investors were also encouraged by weekend polls in Greece that showed the conservative New Democracy party, which backs the country’s international bailout, has a lead over the leftist SYRIZA party, which opposes it ahead of a June 17 election. In Ireland, voters appear poised to reluctantly approve the EU fiscal treaty on Thursday.

Investors shrugged off a private sector report which showed U.S. consumer confidence unexpectedly cooled in May, falling to the lowest level in four months as Americans became more pessimistic about the job market and economic outlook. The report is one of the first in an abbreviated week heavy on economic data, culminating in Friday’s payrolls report.

“The consumer confidence index itself doesn’t do a whole lot for the market - we are seeing traders lining up possibly anticipating better than expected economic news as it comes out during the week either from Chicago, the ISM data or the employment data,” said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

“We’ve got a ray of sunshine breaking out over Europe this morning that is spilling across the Atlantic.”

U.S. markets were closed on Monday for the Memorial Day holiday.

But concern about Spain’s banking system continued to be monitored, as yields on 10-year Spanish bonds remained just under 6.5 percent. Many investors view the 7-percent mark as unsustainable, which could trigger the need for a bailout.

The S&P/Case Shiller composite index of U.S. single-family home prices edged 0.1 percent higher in 20 metropolitan areas in March on a seasonally adjusted basis, falling short of economists’ forecasts for a gain of 0.2 percent. However, it was the second consecutive month of gains which could indicate stabilization in the housing market.

The Dow Jones industrial average gained 137.10 points, or 1.10 percent, to 12,591.93. The Standard & Poor’s 500 Index climbed 15.10 points, or 1.15 percent, to 1,332.92. The Nasdaq Composite Index rose 40.24 points, or 1.42 percent, to 2,877.77.

Facebook Inc shares hit a new low, dropping to $30.03 on talk it was in discussion to buy Oslo-based Opera Software , while analysts said competition from Google Inc and others could push the price tag of any deal above $1 billion.

Vertex Pharmaceuticals Inc plunged 18.1 percent to $53.10 as the biggest drag on the Nasdaq 100 index after the drugmaker released corrected data involving its cystic fibrosis treatments on Tuesday that lowered the number of patients who showed certain levels of improved lung function.

Defense equipment manufacturer Teledyne Technologies Inc said it would buy LeCroy Corp for $240.5 million in cash to add more products to its portfolio. LeCroy shares surged 56.3 percent to $14.29 while Teledyne advanced 0.8 percent to $60.32. (Editing by Padraic Cassidy, Dave Zimmerman)

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