* US, Chinese manufacturing data fuel recovery hopes
* GM files for bankruptcy, thrown out of the Dow
* Cisco and Travelers to join Dow industrials
* Dow and S&P 500 each up 2.6 pct; Nasdaq up 3.1 pct
* For up-to-the-minute market news click []
(Updates to close)
By Ellis Mnyandu
NEW YORK, June 1 (Reuters) - U.S. stocks rose on Monday,
sending the S&P 500 to its highest close in seven months, as
reassuring economic data reinforced hopes that demand will
stabilize, while General Motors'<GM.N> long-expected
bankruptcy filing ended uncertainty about the automaker's
fate.
Data showing that the U.S. manufacturing sector contracted
in May at a slower rate than expected fueled hopes the U.S.
recession that began in December 2007 is moderating. (For
details, double-click []
Investors were also encouraged by signs of manufacturing
stabilization from China, with demand from emerging markets
for commodities and other resources seen leading a revival of
global growth.
"There's a potential for green shoots," said Alan Lancz,
president of Alan B. Lancz & Associates Inc, an investment
advisory firm based in Toledo, Ohio, referring to signs of
economic stabilization. "The best news has been the growth in
China. Investors are betting on growth stimulus from the
emerging markets."
The Dow Jones industrial average <> shot up 221.11
points, or 2.60 percent, to 8,721.44. The Standard & Poor's
500 Index <.SPX> gained 23.73 points, or 2.58 percent, to
942.87. The Nasdaq Composite Index <> jumped 54.35
points, or 3.06 percent, to 1,828.68.
The broad-based advance extended the U.S. stock market's
recovery from the 12-year closing low of March 9, with the
benchmark S&P 500 now up about 40 percent since then.
The S&P 500's gain on Monday marked its highest close
since last November, and the Dow climbed to its highest finish
since January. The Nasdaq had its highest close since October
2008.
The S&P 500 hit another crucial milestone, ending above its 200-day moving average for the first time since December
2007, a feat that some analysts took as possibly a harbinger
of additional gains ahead.
In Monday's rally, the standouts included shares of big
manufacturers such as Boeing Co <BA.N>, which rose 6.4 percent
to $47.70, while United Technologies Corp <UTX.N> added 5.1
percent to $55.27.
Shares of energy companies also surged, with Chevron Corp
<CVX.N> up almost 4 percent at $69.21 as front-month U.S.
crude oil futures climbed $2.27 to settle at $68.58 a barrel.
Exxon Mobil Corp <XOM.N> shot up 3.5 percent to $71.76.
Shares of other natural resources companies also gained.
Aluminum producer Alcoa Inc <AA.N> added 6.6 percent to $9.83,
while miner Freeport-McMoran <FCX.N> gained 6.8 percent to
$58.12.
As expected, General Motors filed for bankruptcy on
Monday, marking an historic fall from grace for a storied
American corporation. The filing eliminated some market
uncertainty about the future of the automaker that has
received billions of dollars in government money to stay
afloat. []
"The Chrysler bankruptcy looks like it's finishing up
smoothly and investors are hoping that the same thing is in
the cards with the GM situation," Lancz said.
Following the bankruptcy filing, Dow Jones Indexes said GM
will be removed from the Dow Jones industrial average and will
be replaced by Cisco Systems Inc <CSCO.O>. Embattled financial
company Citigroup Inc <C.N> will also be deleted from the Dow
average and Travelers Cos Inc <TRV.N> will take its place.
[]
Cisco, a maker of networking equipment, provided one of
the biggest boosts to the Nasdaq, rising 5.4 percent to
$19.50, while Travelers gained 3.1 percent to $41.91 on the
New York Stock Exchange.
GM shares ended unchanged at 75 cents, a day before their
suspension by the NYSE, while Citigroup slipped 0.8 percent to
$3.69.
China's manufacturing sector continued to expand
moderately in May as new export orders improved, two surveys
showed, adding to tentative signs the world's third-largest
economy was stabilizing. []
(Reporting by Ellis Mnyandu; Editing by Jan Paschal)
