US STOCKS-Strong economic data boosts Wall Street

                                

                                
 * Deal to form world's largest airline boosts transports
                                
 * Apple shares up as iPad sales top 1 million
                                
 * Dow up 1.3 pct, S&P up 1.3 pct, Nasdaq up 1.5 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates to close, changes byline)
                                
 By Rodrigo Campos
                                
 NEW YORK, May 3 (Reuters) - U.S. stocks staged a broad
rally that drove the S&P 500 to its best day in two months on
Monday after manufacturing, consumer spending and construction
data instilled confidence that the economic recovery is gaining
traction.
                                
 Transport stocks had their best day in six months following
an industry report that the U.S. manufacturing sector grew in
April at its fastest pace in almost six years and as UAL Corp
<UAUA.O> agreed to buy Continental Airlines Inc <CAL.N> to
create the world's largest airline. [ID:nN02143069]
                                
 "All these numbers are good and continue to point to the
economy doing very, very well," said Stephen Massocca, managing
director at Wedbush Morgan in San Francisco.
                                
 Details of a European financial rescue package for
debt-stricken Greece also provided a measure of relief on an
issue that has cast a cloud over the market in recent months.
For details see [ID:nSGE64208W].
                                
 The Dow Jones industrial average <.DJI> rose 143.22 points,
or 1.30 percent, to 11,151.83. The Standard & Poor's 500 Index
<.SPX> gained 15.57 points, or 1.31 percent, to 1,202.26. The
Nasdaq Composite Index <.IXIC> added 37.55 points, or 1.53
percent, to 2,498.74.
                                
 The government reported an unexpected rise in construction
spending in March, and consumer spending edged up for a
sixth-straight month. [ID:nN03193333]
                                
 The report on manufacturing from the Institute for Supply
Management helped boost shares of industrial companies,
including Dow components Caterpillar Inc <CAT.N> and Boeing Co
<BA.N>, which closed up 2.7 percent.
                                
 Consumer discretionary shares <.GSPD> were among the
top-performing sectors on the broader S&P 500, with upscale
retailer Nordstrom Inc <JWN.N> up 5.6 percent at $43.63.
                                
 Shares of UAL, the parent of United Airlines, rose 2.4
percent to $22.11, and Continental Airlines rose 2.3 percent to
$22.86 after UAL agreed to buy Continental Airlines Inc <CAL.N>
in a $3.2 billion stock deal. Airline shares led the advance in
the Dow Jones Transport index <.DJT>, rising 2.9 percent in the
largest daily percentage gain in six months.
                                
 Home builder and related shares rallied on the construction
spending data. The PHLX housing index <.HGX> jumped 2.4
percent, with Hovnanian Enterprises Inc <HOV.N> up 12.4 percent
to $7.99 and timber company Weyerhaeuser Co <WY.N> up 2.5
percent at $50.76.
                                
 The Nasdaq registered the biggest gains of the three major
indexes, helped by a 2 percent gain in Apple Inc <AAPL.O> after
the company said it has sold 1 million iPads since the tablet
computer's early April launch, exceeding expectations. Apple
shares closed at $266.35. [ID:nN03193218]
                                
 Chip maker stocks gained as global semiconductor sales in
March rose according to industry data. SanDisk Corp <SNDK.O>
jumped 9.2 percent to $43.52 and the PHLX semiconductor index
<.SOXX> added 2.6 percent. [ID:nSGE6420EW].
                                
 U.S.-listed shares of BP Plc <BP.L> <BP.N> were the
second-most heavily traded on the New York Stock Exchange,
falling 3.8 percent to $50.19. The energy giant promised to pay
for the cleanup and compensation claims for a catastrophic oil
spill threatening the U.S. Gulf shore and said it was working
to stem the undersea leak. [ID:nN03142622]
                                
 On the flip side, shares of companies that make products
used to counteract the oil spill in the Gulf of Mexico jumped.
Nalco Holding Co <NLC.N> gained 5.9 percent to $26.19 while
Superior Energy Services Inc <SPN.N> added 1.2 percent to
$27.38 and Clean Harbors Inc <CLH.N> gained 5.6 percent to
$66.98. [ID:nN03218651].
                                
 Billionaire investor Warren Buffett on Sunday stood by his
feisty defense of a controversial mortgage transaction marketed
by Goldman Sachs Group Inc <GS.N> that is at the center of
government fraud charges against the bank. Buffet, whose
Berkshire Hathaway <BRKa.N> company owns $5 billion of Goldman
preferred shares that pay out a hefty 10 percent dividend, said
the investment bank's behavior does not warrant public fury.
[ID:nN02162966]
                                
 Goldman Sachs shares rose 3 percent to $149.50.
                                
 About 8.6 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, below last
year's estimated daily average of 9.65 billion.
                                
 Advancing stocks outnumbered declining ones on the NYSE by
a ratio of about 17 to 5, while on the Nasdaq, about 13 stocks
rose for every five that fell.
 (Additional reporting by Chuck Mikolajczak; Editing by Leslie
Adler)