Wall Street rises in choppy day on resource boost

NEW YORK (Reuters) - Stocks rose in a choppy session on Wednesday as a rebound in oil prices and other commodities lifted energy, mining and materials shares, offsetting nervousness over whether Washington will agree on a bailout for ailing car makers.

Chevron was the Dow's biggest lift, rising 3.8 percent, as the price of oil was boosted by signs that major exporter Saudi Arabia will cut January supplies to customers.

Guarded optimism that a financial lifeline for ailing automakers could be imminent had earlier provided support and lifted shares of General Motors Corp and Ford Motors Corp . But signs that the package may still face political hurdles fueled uncertainty, sending GM down 2.1 percent, while Ford edged up 0.6 percent.

"There's a hope at the beginning of every trading day recently that we've found a bottom and that maybe we're not off to the races again but we have indeed found a bottom," said Matt Kaufler, portfolio manager and equity analyst at Federated Clover Investment Advisors in Rochester, New York.

"People want to believe but they're reluctant to truly embrace it."

The Dow Jones industrial average rose 70.09 points, or 0.81 percent, to 8,761.42. The Standard & Poor's 500 Index gained 10.57 points, or 1.19 percent, to 899.24. The Nasdaq Composite Index was up 18.14 points, or 1.17 percent, at 1,565.48.

Trading was volatile with indexes swinging between gains and losses. The day's gain helped the market narrowly avert what would have been the first two days of losses in a row since its November 21 low.

Since reaching that low, the broad S&P 500 is up more than 20 percent, but is still down close to 40 percent for the year so far.

The push to rescue U.S. car markers became tied up in partisan wrangling as the U.S. House of Representatives appeared set to vote on a proposed $15 billion bridge loan, but congressional Republicans offered an alternative plan.

Shares of GM retreated 2.1 percent to $4.60, while Ford was up 0.6 percent at $3.25 after vacillating between negative and positive territory.

"With things as precarious as they are, the last thing the market wants is an insolvency in Detroit," David Joy, chief market strategist at RiverSource Investments, told the Reuters Investment Outlook Summit in New York.

Chevron and Exxon Mobil were among the Dow's biggest lifts, rising 3.8 percent to $78.44 and 2.4 percent to $80.07, respectively. Crude oil rose $1.45 to settle at $43.52 a barrel.

Yahoo Inc was among the top gainers on the Nasdaq after Ivory Investment Management LP, which has a 1.5 percent stake in the Internet company, urged it to sell its search business to Microsoft Corp , saying the deal would double its value.

Yahoo jumped 9.9 percent to $13.40.

Companies continued to flood investors with more worrying outlooks, however, including Eastman Kodak . The company warned 2008 revenue and profit would fall short of expectations, sending its stock down 8.5 percent at $6.59.

Also offering a disappointing profit warning, Electronic Arts Inc was one of the Nasdaq's biggest drags the day after the video game maker its fiscal 2009 profit and revenue will fall short of forecasts. EA was down 12.1 percent at $17.00.

American Express Co was the Dow's biggest drag, falling 7.4 percent to $21.56, after two analysts said it would be the most affected in the credit card industry from loan losses, a spending slowdown and funding needs.

Trading was low on the New York Stock Exchange, with about 1.31 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 1.99 billion shares traded, below last year's daily average of 2.17 billion.

Advancing stocks outnumbered decliners on the NYSE by 2,177 to 952 while advancers beat decliners on the Nasdaq by about 1,770 to 973.

(Additional reporting by Kristina Cooke; Editing by James Dalgleish)