* $5 drop in price of oil eases spending concerns
* Bernanke says Fed may extend emergency lending
* Nasdaq snaps 3-day losing streak
(Updates to close)
By Kristina Cooke
NEW YORK, July 8 (Reuters) - U.S. stocks rose in another
turbulent session on Tuesday as a pullback in oil prices eased
worries about consumer and business spending, while financial
shares gained after the Fed chairman said he may keep open a
lifeline for banks.
Technology and retail companies bounced back after a sharp
sell-off last week, with Wal-Mart <WMT.N> the biggest boost to
the Dow. Apple <AAPL.O> rose ahead of Friday's new iPhone
launch, helping the Nasdaq.
The market fluctuated throughout the day on jitters ahead
of the second-quarter earnings season which kicks off in
earnest after the closing bell. Shares of aluminum producer
Alcoa Inc <AA.N> fell 3.2 percent as investors feared higher
input costs may have hurt profits.
Financial shares climbed after Federal Reserve Chairman Ben
Bernanke said in a speech that the U.S. central bank may extend
emergency lending facilities for big Wall Street banks past
year-end, showing the Fed is determined to stop the
housing-inspired credit crisis from wreaking further havoc in
the economy.
Treasury Secretary Henry Paulson added to that optimism
when he said flatter sales of existing homes in recent months
implied some stabilizing in home-buying demand.
"You had two major officials today who made clear that they
will do everything possible to shore up the housing market,"
said Andrew Harding, chief investment officer for fixed-income
at Allegiant Asset Management in Cleveland, Ohio.
The Dow Jones industrial average <> jumped 152.25
points, or 1.36 percent, at 11,384.21, while the Standard &
Poor's 500 Index <.SPX> gained 21.39 points, or 1.71 percent,
to 1,273.70.
The Nasdaq Composite Index <> rose 51.10 points, or
2.28 percent, at 2,294.42, snapping a 3-day losing streak.
Fannie Mae <FNM.N> and Freddie Mac <FRE.N> shares rebounded
from 15-year lows, after the mortgage finance companies' main
regulator said proposed accounting rules should not force them
to raise more capital. The comments eased fears the companies'
value would be diluted by a massive capital increase.
Fannie Mae shares rose 11.9 percent to $17.62 and Freddie
Mac shares jump 13 percent to $13.46.
General Electric <GE.N> shares rose 3.5 percent to $28.06,
and were the top boost to the S&P 500, just days before the
economic bellwether releases its second-quarter earnings.
Wal-Mart added 3.9 percent to $59.11.
Apple gained 2.5 percent to $179.55. Its new iPhone sold
out online in Britain ahead of Friday's launch, defying general
consumer gloom. Google <GOOG.O> rose nearly 2 percent to
$554.53 and IBM <IBM.N> was also up almost 2 percent to
$123.88.
An index of S&P financial shares <.GSPF> rose 5.7 percent.
JPMorgan Chase & Co's <JPM.N> chief executive Jamie Dimon
said in a speech that the future of the U.S. economy is bright,
but more short-term suffering is ahead. JPMorgan shares rose
5.1 percent to $35.77.
A drop of more than 4 percent in U.S. crude prices <CLc1>
made energy companies the top drags on the S&P and the Dow.
Exxon Mobil Corp <XOM.N> slid 1.2 percent to $85.94,
Chevron Corp <CVX.N> also fell 1.1 percent to $95.79, and oil
services company Schlumberger <SLB.N> declined 3.3 percent to
$96.19.
Economic data released on Tuesday showed consumers still
hurting, however. Pending sales of previously owned homes
plummeted 4.7 percent in May, and sales at chain stores, though
improved last week, were weaker in June. For more see
[].
Trading was moderate on the New York Stock Exchange, with
about 1.7 billion shares changing hands, below last year's
estimated daily average of roughly 1.9 billion, while on
Nasdaq, about 2.49 billion shares traded, above last year's
daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by about 2 to 1
on NYSE and Nasdaq.
(Additional reporting by Jennifer Ablan; Editing by James
Dalgleish)
