US STOCKS-S&P 500 gains 1 pct on WaMu, easing credit fears

(Updates with S&P up 1 percent)

By Cal Mankowski

NEW YORK, April 7 (Reuters) - U.S. stocks jumped on Monday, pushing the S&P 500 index up 1 percent, as news that Washington Mutual Inc (WM.N: Quote, Profile, Research), is close to securing a $5 billion cash infusion bolstered hopes that the credit crisis is easing and drove up financial shares.

Shares of WaMu, the largest U.S. savings and loan company and one of the largest U.S. mortgage lenders, surged by more than one third, while the S&P financial index rose 2.52 percent.

Washington Mutual is close to obtaining $5 billion from U.S. private equity firm TPG and other investors, people familiar with the situation said on Monday. An investment would ease the thrift's need for capital as losses from subprime mortgages and other loans soar. For details see [ID:nN07475686].

"I think it's another manifestation of the defrosting of the credit freeze and the money the Fed is pumping into the system eventually finding its way to where it is intended to benefit, and that's the financial area," said Ned Riley, chief executive of Riley Asset Management in Marshfield, Massachusetts.

The Dow Jones industrial average .DJI was up 106.49 points, or 0.84 percent, at 12,715.91. The Standard & Poor's 500 Index .SPX was up 14.25 points, or 1.04 percent, at 1,384.65. The Nasdaq Composite Index .IXIC was up 14.31 points, or 0.60 percent, at 2,385.29.

A rise in energy shares as the price of crude oil gained also buoyed markets. Shares of Exxon Mobil Corp (XOM.N: Quote, Profile, Research) rose 1.3 percent to $89.90 and Chevron (CVX.N: Quote, Profile, Research) rose 1.4 percent to $89.28.

"Energy stocks are moving in concert with the price of oil, which defies logic, common sense and the laws of gravity when one looks at the surplus inventory in crude and gasoline worldwide and the lack of economic growth," Riley said.