Wall St jumps with banks after analyst's comments

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks rallied more than 2 percent on Monday as bullish comments on financial sector performance from analyst Meredith Whitney lifted hopes that banks' quarterly results may be stronger than expected.

Light volumes made it easier for stocks to post such a big move, analysts said. The Dow industrials and S&P 500 had their best gains since June 1.

Whitney, who has in the past been bearish, also upgraded Goldman Sachs to a "buy" this morning, driving its stock up 5.3 percent to $149.44. The S&P Financial Index, meanwhile, jumped 6.5 percent.

In comments to CNBC television, Whitney said bank shares were in for at least a short-term gain of 15 percent and that major financials, including Bank of America Corp and JPMorgan Chase & Co, which along with Goldman are scheduled to report results this week, could do well in the second quarter.

Her comments offset concerns that CIT Group Inc, a lender to many small- and mid-sized businesses, was struggling to stay afloat.

The Goldman Sachs upgrade "kind of turned sentiment around short-term. It was enough to send the market up," said Fred Dickson, market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. "Basically, people are putting a little bit of money on the table ahead of ... earnings this week."

Dickson also said the gains come on the heels of four straight down weeks for the Dow and S&P 500, suggesting the market had become oversold.

The Dow Jones industrial average rose 185.16 points, or 2.27 percent, to end at 8,331.68. The Standard & Poor's 500 Index was up 21.92 points, or 2.49 percent, at 901.05. The Nasdaq Composite Index was up 37.18 points, or 2.12 percent, at 1,793.21.