Wall St jumps after Spain sets timetable for reforms

U.S. stocks rallied on Thursday and the S&P 500 was set to break its five-day decline after Spain unveiled plans for economic reform, easing some worries about how the euro zone's debt crisis will be contained.

The broad-based rally put the benchmark S&P 500 index on track for its biggest percentage gain since the Federal Reserve announced its plan for a third round of stimulus on September 13.

Spain announced a detailed timetable for economic reforms for the fiscally troubled nation and a tough 2013 budget based mostly on spending cuts.

The EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said Spain's detailed timetable for economic reforms goes beyond what the European Commission has asked of Spain. Rehn said it is an ambitious step forward.

"Any information that gives some understanding about what's going to happen is good for the market. It's small news, but more certainty is good," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois.

The Dow Jones industrial average was up 95.92 points, or 0.72 percent, at 13,509.43. The Standard & Poor's 500 Index was up 15.28 points, or 1.07 percent, at 1,448.60. The Nasdaq Composite Index was up 43.86 points, or 1.42 percent, at 3,137.56.

Apple , up 2.4 percent at $681.21, gave the biggest lift to the Nasdaq.

Hewlett-Packard Co shares rose 0.6 percent to $17.21, reversing a morning decline after Jefferies downgraded the Dow component's stock to "underperform." The brokerage said it expected continued problems in HP's personal computer segment.

On the deal-making front, Tempur-Pedic International Inc agreed to buy rival mattress maker Sealy Corp for about $242 million and assume about $750 million in debt. Tempur-Pedic shares jumped 13.6 percent to $30.42, while Sealy's stock rose 2.3 percent to $2.19.

Stocks were advancing before Spain's announcement on hopes that China would take steps to spur its slowing economy.

China has severely underestimated this year's global economic slowdown, and further cuts to Chinese interest rates or bank reserve requirements will hinge on any new deterioration in the external environment, a central bank adviser said on Thursday.

The comments underlined the view that global central banks were in lockstep with regards to stimulating their economies, after monetary easing plans were put in place by the European Central Bank and the Federal Reserve.

U.S. economic data was mixed. A report showed initial jobless claims dropped by 23,000 to 359,000, significantly more than the decline of 4,000 that had been expected.

But the final read on second-quarter gross domestic product showed growth of just 1.3 percent, weaker than an expected 1.7 percent. And August durable goods orders tumbled 13.2 percent, much more than the expected drop of 5 percent.

(Editing by Jan Paschal)