US STOCKS-Wall St buoyed by oil sector, window dressing

* Oil jumps above $71, lifting energy stocks

* Broker's upgrade of KB Home lifts home builders' stocks

* Dow up 1.1 pct, S&P 500 up 1 pct, Nasdaq up 0.5 pct

* For up-to-the-minute market news click [STXNEWS/US]
(Updates to late afternoon, changes byline)

By Caroline Valetkevitch

NEW YORK, June 29 (Reuters) - U.S. stocks rose on Monday
as higher oil prices lifted shares of energy companies and
investors bought shares to improve their holdings on the day
before the second quarter draws to a close.

Crude oil futures CLc1 jumped $2.33 to settle at $71.49
per barrel, boosting shares of energy companies. Exxon Mobil
Corp (XOM.N) climbed 1.7 percent to $70.19.

Fund managers are building up their portfolios before the
quarter ends in a ritual known as "window dressing" by selling
some of the quarter's losers and scooping up the winners. This
bolstered stocks as well.

"It's the end of the quarter (on Tuesday) so most of the
funds out there might be adding on to some of their
positions," said Tom Schrader, managing director of U.S.
equity trading at Stifel Nicolaus Capital Markets in
Baltimore.

The S&P 500 is up 16.1 percent for the quarter ending on
Tuesday, despite a gain of just 0.81 percent so far in June.
It could be the best quarter for the S&P 500 since the fourth
quarter of 1998, when it jumped nearly 21 percent.

Shares of home builders also helped underpin the market
after Credit Suisse raised its rating on KB Home (KBH.N),
citing stronger orders and more attractive valuation. KB Home
was up 5 percent at $14.08. The Dow Jones U.S. Home
Construction Index .DJUSHB advanced 1 percent.

The Dow Jones industrial average .DJI was up 92.27
points, or 1.09 percent, at 8,530.66. The Standard & Poor's
500 Index .SPX was up 8.90 points, or 0.97 percent, at
927.80. The Nasdaq Composite Index .IXIC was up 8.97 points,
or 0.49 percent, at 1,847.19.

An S&P energy index .GSPE was up 1.21 percent, while an
S&P index of financial stocks .GSPF was up 1.08 percent.
infrastructure, raising supply concerns.

Wall Street's eyes and ears also were on the news coverage
of Bernie Madoff, who was sentenced to 150 years in prison on
Monday for running what prosecutors called a $65 billion Ponzi
scheme. When Madoff's fraud was revealed last December, its
scope was so brazen and so massive that it shocked investors
and made everyone question their broker.

Signs of life in overseas markets also prompted some
investors to buy U.S. equities by renewing optimism about the
prospects for an economic recovery.

Shanghai stocks .SSEC reached a one-year closing high
for the fourth straight session as signs of a Chinese economic
recovery and ample liquidity boosted the market, bolstering
investor sentiment.

In the energy sector, Occidental Petroleum (OXY.N) jumped
3.4 percent to $66.46. Crude oil futures CLc1 rose after
Nigerian militants said they attacked the country's oil
facilities, which set off some concerns about supply.

On the Nasdaq, Microsoft Corp (MSFT.O) advanced 2.1
percent at $23.83 after Deutsche Bank raised its price target
on the stock to $30 from $22.

On the New York Stock Exchange, Hewlett-Packard Co (HPQ.N)
gained 3.6 percent to $38.97 and ranked among the Dow
industrial's biggest advancers.
(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)