US STOCKS-Market advances on relief on banks, jobs data

* Banks rise after stress tests results

* Jobs data boosts optimism on economy; energy shares up

* Dow up 1.4 pct; S&P 500 up 1.7 pct; Nasdaq up 0.6 pct

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By Ellis Mnyandu

NEW YORK, May 8 (Reuters) - U.S. stocks rose on Friday after the government's bank stress tests fueled hopes that the worst is over for the financial sector, while news of fewer-than-expected April job cuts suggested the economic slump was easing.

Shares of several major banks rose, with No. 2 U.S. bank JPMorgan Chase Inc (JPM.N: Quote, Profile, Research) up 7.8 percent at $38.00 and the Dow's top advancer. Citigroup Inc (C.N: Quote, Profile, Research) up 7.9 percent to $4.11.

The market's other boost was a rally in the shares of energy companies, in concert with higher oil prices.

The release of the stress test results "has given people a little bit of confidence that the government can help to solve this part of the financial crisis," said Richard Sparks, senior equities analyst and options trader at Schaeffer's Investment Research in Cincinnati.