Stocks climb on energy

NEW YORK (Reuters) - Stocks rose on Wednesday as a jump in the price of oil bolstered shares of energy companies, including Chevron , ahead of next week's OPEC meeting.

The boost from the energy sector initially propelled the market up more than 2 percent, but signs that the proposed government rescue of U.S. automakers might face headwinds caused the market to pare gains.

Shares of Ford Motors Corp and General Motors Corp turned negative after U.S. Senator Richard Shelby of Alabama said he intended to slow the auto bailout bill down.

GM shares fell 3.4 percent to $4.54, while Ford shares fell 4.6 percent to $3.08.

"There's a lack of unity as to whether something will or will not happen on the auto bailout, and that's partly why the market lost some ground too," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

The Dow Jones industrial average <.DJI> was up 79.09 points, or 0.91 percent, at 8,770.42. The Standard & Poor's 500 Index <.SPX> was up 8.63 points, or 0.97 percent, at 897.30. The Nasdaq Composite Index <.IXIC> was up 18.58 points, or 1.20 percent, at 1,565.92

Energy and materials companies led the day after reports that Saudi Arabia, OPEC's largest oil exporter, informed major customers of a significant cut in supplies for January before next week's OPEC meeting.

Chevron rose more than 4.6 percent to $79.10, making it the top boost on the Dow. Exxon Mobil gained about 2.7 percent to $80.31, as crude oil jumped more than $3 to $47.90 a barrel ahead of next week's OPEC meeting.

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

Yahoo shares jumped 6.6 percent to $12.99 on Nasdaq.

(Additional reporting by Ellis Mnyandu; Editing by James Dalgleish)

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