* Improved sentiment on 'fiscal cliff' helps stocks
* Earnings boost Lowe's, Tyson Foods
* S&P rebounds to close above 200-day moving average
* Indexes up: Dow 1.7 pct, S&P 2 pct, Nasdaq 2.2 pct
By Chuck Mikolajczak
NEW YORK, Nov 19 (Reuters) - U.S. stocks bounced higher for
a second consecutive session on Monday as investors were
encouraged by the early atmosphere surrounding talks to tackle
the nation's fiscal crunch.
Stronger-than-expected earnings from Lowe's and Tyson Foods,
as well as encouraging housing data, also contributed to the
market's advance. Tyson and Lowe's were the top two percentage
gainers on the S&P 500.
The S&P 500 is up more than 2 percent in the last two
sessions as rhetoric from legislators over the weekend suggests
a deal could be reached to stave off the looming "fiscal cliff,"
a series of tax and spending changes that will begin to take
effect in the new year. The two sides are still far apart in
The benchmark S&P index had fallen 5.3 percent between
Election Day and Friday's rebound, as investors took the
opportunity to sell stocks - including some of the year's best
performers - just in case Washington cannot come to an agreement
and taxes on dividends and capital gains rise in 2013.
"Everyone is quietly breathing a sigh of relief, because
frankly, we are no longer looking over the edge of a cliff, we
are looking at an opportunity to step back and recalibrate,"
said Peter Kenny, managing director at Knight Capital in Jersey
City, New Jersey.
However, the rebound could be a short-lived reprieve from
the sharp declines and market volatility could still rise,
depending on progress in negotiations. A number of sectors were
considered oversold on a technical basis - suggesting a buying
"There is no question, what lit the fuse was constructive
conversation, constructive talking points out of Washington that
has done far more to help the market than anything else - the
backdrop is the oversold" market, Kenny said.
Monday's advance marked the biggest percentage gain for the
S&P 500 since November 6, when the European Central Bank
announced a new bond-buying program aimed at containing the
region's debt crisis.
Shares of Lowe's Cos Inc, the world's No. 2 home
improvement chain, jumped 6.2 percent to $33.96 to hit a 52-week
high after the company reported higher-than-expected quarterly
profit and raised its full-year sales forecast.
Home improvement chains tend to benefit as housing
strengthens. U.S. home resales unexpectedly increased in
October, while separate data showed homebuilder sentiment rose
to its highest level in over six years in November.
The PHLX Housing Index rose 1.8 percent.
The Dow Jones industrial average gained 207.65
points, or 1.65 percent, at 12,795.96. The Standard & Poor's 500
Index was up 27.01 points, or 1.99 percent, at 1,386.89.
The Nasdaq Composite Index was up 62.94 points, or 2.21
percent, at 2,916.07.
The S&P edged above its 200-day moving average at around
1,382, which has acted as a resistance level since a drop below
the technically significant mark on November 8.
Tyson Foods Inc beat expectations and gave an upbeat
forecast, sending its stock up 10.9 percent to $18.72.
Intel shares edged higher, up 0.3 percent to $20.25
after the company said its chief executive will retire in May.
Commodities prices surged, boosting shares of resource
companies. Freeport-McMoRan rose 4.1 percent to $38.28,
while U.S. Steel rose 5.3 percent to $21.15. The S&P
materials sector advanced 2.9 percent as the best
performing of the 10 major S&P sectors.
Volume was light and is expected to remain so throughout the
Thanksgiving Day holiday-shortened trading week, with about 6.14
billion shares traded on the New York Stock Exchange, NYSE MKT
and Nasdaq, below the daily average of 6.49 billion.
Advancing stocks outnumbered declines on the NYSE by 2,678
to 350, while on the Nasdaq, advancers beat decliners 1,949 to