* January nonfarm payrolls fall by most since 1974 * Financials rise ahead of expected bailout plan on Monday * Sentiment boosted by hopes of stimulus package * Techs and banks lead market's advance * Dow and S&P 500 up 2.7 pct, Nasdaq up 2.9 pct * For up-to-the-minute market news, click [STXNEWS/US] (Updates to close) By Leah Schnurr NEW YORK, Feb 6 (Reuters) - U.S. stocks rallied for a second day on Friday on hopes Washington's stimulus package and a bank rescue plan will bolster the ailing economy, even as data showed the biggest one-month job losses in 34 years. A nearly 12 percent surge in bank shares .BKX led Wall Street higher. Investors anticipate the plan scheduled to be announced on Monday by Treasury Secretary Timothy Geithner will shore up banks' balance sheets and spur lending. Bank of America (BAC.N) soared more than 25 percent the day after falling to its lowest level since 1984 on investor fears it would have to be nationalized -- a fear that the company's chief executive on Friday said was unfounded. As well, the U.S. Senate struggled to craft a hefty stimulus package, with moderate senators trying to trim the $937 billion price tag. Senate Majority leader Harry Reid said he hoped that "between 5:00 and 7:00 today" (2200 to 0000 GMT) there would be a deal for senators to vote on. For more see [ID:nN05403943]. "We have now a particular urgency viewed by not only Congress but the president, and now maybe even the public, that something must be done," said Michael Pento, senior market strategist at Delta Global Advisors. "I think the stimulus package will get passed and, of course, we're going to have that massive bank aggregator or some kind of plan to rescue the banks." The Dow Jones industrial average .DJI rose 217.52 points, or 2.70 percent, to 8,280.59. The Standard & Poor's 500 Index .SPX gained 22.75 points, or 2.69 percent, to 868.60. The Nasdaq Composite Index .IXIC was up 45.47 points, or 2.94 percent, at 1,591.71. Gains of the last two days pushed the Nasdaq into positive territory for the year-to-date for the first time since early January. For the week, the S&P 500 was up 5.2 percent, the Dow rose 3.5 percent and the Nasdaq saw its best week since early December, up 7.8 percent. In the latest sign of the deteriorating economy, a report showed U.S. nonfarm payrolls fell in January by the most since December 1974 as the recession deepened, sending the unemployment rate up to 7.6 percent. For details, see [ID:nN06435445]. Financial shares, however, charged higher in anticipation of Monday's details. Bank of America jumped 26.7 percent to $6.13 but remains down more than 50 percent year-to-date. The bank's chief executive, Kenneth Lewis, in an interview with CNBC, said "categorically" that the bank did not need more money from the government and does not expect to be nationalized. JPMorgan Chase (JPM.N) climbed 12.6 percent to $27.63. The KBW bank index .BKX rose 11.9 percent, and the S&P financial index .GSPF gained 8.1 percent. Some of the ideas under discussion for the bank rescue plan include asset guarantees from the government, buying up toxic assets and housing them in a so-called "bad bank," and capital injections to keep the banks afloat. [ID:nN06446621]. With gains widespread, the tech sector was also a standout. Apple (AAPL.O) was among the biggest boost, up 3.4 percent at $99.72, and BlackBerry maker Research In Motion (RIM.TO) (RIMM.O) rose 4.2 percent to $59.17. Analysts said the group is viewed as likely to be among the first to pull out of the economic slowdown. Trading was active on the New York Stock Exchange, with about 1.61 billion shares changing hands, above last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.43 billion shares traded, above last year's daily average of 2.28 billion. Advancing stocks outnumbered declining ones on the NYSE by 2,551 to 538 while advancers beat decliners on the Nasdaq by about 2,023 to 654.

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