* Tech advances on spending hopes
* Bernanke, Paulson urge action on bailout
* Dow up 0.6 pct; S&P up 0.4 pct, Nasdaq up 0.8
(Updates to midday, changes byline)
By Steven C. Johnson
NEW YORK, Sept 23 (Reuters) - U.S. stocks rose on Tuesday,
led by technology bellwethers such as Microsoft Corp <MSFT.O>,
on hopes a proposed $700 billion financial sector bailout will
loosen up lending and boost business and consumer spending.
Oil prices retreated after the prior session's surge,
boosting airline and retail shares and helping reverse the
broader market's nearly 4 percent slide on Monday.
Trading was tentative, though, as Treasury Secretary Henry
Paulson and Federal Reserve Chairman Ben Bernanke urged
Congress to approve the government's rescue package lest frozen
credit markets further damage an already struggling economy.
The government has proposed spending $700 billion to mop up
bad mortgage debt from bank balance sheets to stabilize the
financial sector.
"This plan is going to get done, and there will be a sigh
of relief from the market," said Steve Goldman, market
strategist at Weeden & Co in Greenwich, Connecticut. "It won't
be a panacea for the housing crisis, but it will unlock the
freeze in the financial system, and that's a necessary step."
The Dow Jones industrial average <> was up 62.84
points, or 0.57 percent, at 11,078.53. The Standard & Poor's
500 Index <.SPX> was up 4.66 points, or 0.39 percent, at
1,211.75. The Nasdaq Composite Index <> was up 16.36
points, or 0.75 percent, at 2,195.34.
Microsoft, a Dow component, gained 2.3 percent, putting it
among the top boosts to both the Nasdaq and the S&P 500.
Computer maker Hewlett-Packard <HPQ.N> rose 1.5 percent,
while iPod maker Apple Inc <AAPL.O> added 1.6 percent.
Investors also snapped up shares of big manufacturers,
including plane maker Boeing <BA.N>, up 2 percent.
"It does seem like both sides are coming together and want
to get a deal done quickly that will inject a lot of capital
into the economy and free up lending," said Marc Pado, U.S.
market strategist at Cantor Fitzgerald & Co in San Francisco.
"If they can free up lending as a result of this package, I
think that will spur business. If you want to capitalize on a
recovery in the fourth quarter, you're going to go into growth
stocks and that's in tech."
Microsoft shares rose to $26.02 on Nasdaq. The software
maker on Monday announced plans of a $40 billion share
repurchase and raised its quarterly dividend.
HP shares rose to $47.82 on the New York Stock Exchange,
while shares of Apple Inc <AAPL.O> jumped to $133.29.
Shares of financial services companies, including banks
also headed higher, recovering from Monday's slide that drove
the broader market down nearly 4 percent. Shares of JPMorgan
Chase <JPM.N> climbed 1.4 percent to $41.39.
General Electric Co <GE.N> was the top laggard on the S&P
and Dow, falling 3.6 percent to $25.20.
Bernanke told the Senate Banking Committee, "Action by
Congress is urgently required to stabilize the situation and
avert what could otherwise be very serious consequences for our
financial markets and our economy."
(Additional reporting by Ellis Mnyandu; Editing by Kenneth
Barry)
