Wall Street gains as U.S. and China data feed risk appetite

NEW YORK (Reuters) - U.S. stocks kicked off a new month with strong gains on Monday after data showed strength in industrial activity in the United States and China, fueling risk appetite.

The Dow and Nasdaq indexes rose about 1 percent after the pace of growth in the U.S. manufacturing sector quickened unexpectedly in October, while construction spending rose unexpectedly in September.

Commodity shares were boosted by the data, including Freeport-McMoRan Copper & Gold Inc , up 1.5 percent $96.11, and the S&P energy index <.GSPE>, rising 1.3 percent. Oil futures jumped 2.7 percent.

"There's been a lack of good economic news, and this is certainly helpful with the market, particularly (at this level) and (with) earnings expectations remaining high," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville, Tennessee.

The Dow Jones industrial average <.DJI> jumped 110.57 points, or 0.99 percent, at 11,229.06. The Standard & Poor's 500 Index <.SPX> was up 10.93 points, or 0.92 percent, at 1,194.19. The Nasdaq Composite Index <.IXIC> advanced 21.02 points, or 0.84 percent, at 2,528.43.

Boosting the Dow industrials, Intel Corp rose 2.5 percent to $20.55 after Macquarie increased its price target on the chipmaker's stock and raised the U.S. semiconductor sector to positive.

Key base metals prices rose, with copper rallying, after data showed manufacturing in China expanded at the fastest pace in six months in October and on expectations the U.S. Federal Reserve will add monetary stimulus this week.

The Fed looks likely to announce it will relaunch heavy bond buying after two days of meetings end Wednesday. Most analysts expect the size and the scope of asset purchases to be about $100 billion a month, starting with a plan to buy $500 billion in bonds between now and early 2011.

In Tuesday's mid-term congressional elections, Republicans were predicted to take control of the U.S. House of Representatives, while Democrats are seen retaining control of the Senate, setting up the prospect of legislative gridlock.

Financial stocks were pressured by M&A and bankruptcy news.

Wilmington Trust Corp fell 44 percent to $4.01 after M&T Bank Corp agreed to buy the troubled U.S. regional bank and wealth manager at a bargain price.

Ambac Financial Group Inc tumbled 37 percent at 51 cents after the bond insurer, once the largest in the U.S., said it may file for bankruptcy protection this year.

(Reporting by Angela Moon; additional reporting by Leah Schnurr; editing by Jeffrey Benkoe)

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