Wall Street leaps on Obama's infrastructure bid

NEW YORK (Reuters) - U.S. stocks rallied 3 percent on Monday as investors bet that President-elect Barack Obama's plan for major infrastructure investment would help avert a deeper economic slump.

The surge propelled the S&P 500 into positive territory for the month, and extended the index's recovery since a market low on November 21 when it matched 11-year lows.

Shares of companies poised to be among the big beneficiaries of major construction projects, including heavy equipment maker Caterpillar Inc and engineering services company Shaw Group Inc were standouts. Energy companies also rose.

The Dow Jones industrial average <.DJI> climbed 296.21 points, or 3.43 percent, to 8,931.63. The Standard & Poor's 500 Index <.SPX> rose 29.97 points, or 3.42 percent, to 906.04. The Nasdaq Composite Index <.IXIC> gained 48.66 points, or 3.22 percent, to 1,557.97.

Since the November 21 low, the S&P 500 is now up 20.5 percent.

Caterpillar, up 12.1 percent at $42.90, was the top boost to the Dow, followed by technology services company International Business Machines Corp , up 5 percent at $84.39. Sentiment also got a boost from hopes of a government aid deal for General Motors , Ford and Chrysler.

Shaw Group rose 17 percent to $19.08.

After Friday's dismal payrolls data showed the economy shed more than half-a-million jobs in November, Obama took center stage at the weekend by outlining plans for the largest infrastructure investment since the 1950s.

(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)