US STOCKS-Wall Street gains; S&P, Nasdaq eye 2009 highs

                                
  
                                
 * Health insurer shares jump after Senate vote
                                
 * Sanofi to buy Chattem
                                
 * Intel, Alcoa shares climb after broker upgrades
                                
 * Dow up 0.9 pct; S&P 500 up 1.1 pct; Nasdaq up 1.2 pct
                                
 * For up-to-the-minute market news, click STXNEWS/US
 (Updates to late afternoon, changes byline)
                                
 By Leah Schnurr
                                
 NEW YORK, Dec 21 (Reuters) - U.S. stocks climbed on Monday,
with the S&P 500 and Nasdaq eyeing new year highs, lifted by
the healthcare sector after a Senate bill advanced that omitted
some provisions opposed by the industry.
                                
 Stocks also got a lift from new merger and acquisition
activity and brokerage upgrades of two Dow components,
including Alcoa Inc <AA.N>.
                                
 Legislation to overhaul the U.S. healthcare system passed a
crucial test early Monday as backers cleared a procedural
hurdle to approving the bill, which is President Barack Obama's
top legislative priority. For details, see [ID:nN21199371]
                                
 Following the vote, the Morgan Stanley Health Payor index
<.HMO> climbed 3 percent. Health insurers Aetna Inc <AET.N>
added 4.2 percent to $33.89 and Cigna Corp <CI.N> rose 4
percent to $37.24.
                                
 "The bill wasn't as meaty as it could have been, and it
looks like what was finalized may not be as damaging to the
sector as we had feared," said Alan Lancz, president of Alan B.
Lancz & Associates Inc in Toledo, Ohio.
                                
 The fewer the restrictions imposed on insurers, "the better
the prospects will be for the sector and for the market,"
Lancz said.
                                
 The Dow Jones industrial average <.DJI> rose 97.04 points,
or 0.94 percent, to 10,425.93. The Standard & Poor's 500 Index
<.SPX> added 12.43 points, or 1.13 percent, to 1,114.90. The
Nasdaq Composite Index <.IXIC> gained 26.92 points, or 1.22
percent, to 2,238.61.
                                
 If the S&P 500 and Nasdaq hold their gains, the indexes
will rack up new 2009 highs. The broad S&P has gained 23.5
percent for the year.
                                
 Alcoa Inc gave the top boost to the Dow after it made a
joint announcement over the weekend with state-run Saudi
Arabian Mining Co, known as Maaden, that they have agreed to
build a $10.8 billion aluminum complex. For an analysis, see
[ID:nN21239050]
                                
 Morgan Stanley raised its recommendation on Alcoa's stock
to "buy," expecting the company to report increased
profitability in its alumina and downstream divisions. Alcoa
jumped 8.5 percent to $15.83 and helped to lift the materials
sector <.GSPM> 1.4 percent.
                                
 Sentiment also brightened after several acquisition deals,
including an agreement by Sanofi-Aventis <SASY.PA> to buy
consumer healthcare company Chattem Inc <CHTT.O> for about $1.9
billion, driving Chattem's stock up 33 percent to $92.09.
[ID:nLDE5BK12I]
                                
 Barclays upgraded Intel Corp <INTC.O>, lifting the stock
2.4 percent to $20.09 on Nasdaq. [ID:nSGE5BK0H9]
 (Additional reporting by Ryan Vlastelica; Editing by Kenneth
Barry)