Bloomberg U.S. Stocks Rise as Confidence Boosts Banks, Consumer Shares

May 26 (Bloomberg) -- U.S. stocks jumped, sending benchmark indexes higher for the first time in five sessions, as the biggest gain in consumer confidence since 2003 spurred optimism the worst of the recession is over. Two-year Treasury notes were little changed after a record-tying $40 billion auction.

JPMorgan Chase & Co., Home Depot Inc. and American Express Co. climbed at least 4 percent after the Conference Board’s index of sentiment surged to the highest since September. Apple Inc. gained 6.8 percent after being upgraded to “overweight” at Morgan Stanley, which said analysts are underestimating demand for iPhones. Exxon Mobil Corp. led an advance in energy shares as crude oil climbed to a six-month high.

“Consumer confidence was materially better,” said David Sowerby, who helps oversee about $100 billion at Loomis Sayles & Co. in Bloomfield Hills, Michigan. “That allows the market to fight through an expected pause after a rally from March lows.”

The S&P 500 added 2.6 percent to 910.33 at 4:11 p.m. in New York as all 10 industry groups advanced. The Dow Jones Industrial Average increased 196.17 points, or 2.4 percent, to 8,473.49. Eleven stocks gained for each that fell on the New York Stock Exchange, the broadest rally since May 18. The Russell 2000 Index of small companies rose 4.8 percent for the steepest advance since April 9.

The S&P 500 has surged 35 percent from a 12-year low on March 9 on speculation the global recession is easing and as earnings at companies from Ford Motor Co. to Wells Fargo & Co. beat analyst estimates. The index must rise another 37 percent to reach its last closing price before Sept. 15, when Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in history, freezing financial markets. more...