Stocks pared gains on Thursday after an Obama administration official said beleaguered U.S. automaker Chrysler LLC will file for bankruptcy protection in New York almost immediately.

People are stepping to the side, just wanting to see what this Chrysler bankruptcy looks like, said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

When you have a major American company declaring bankruptcy, people just want to see what the nature of that bankruptcy is.

The Dow Jones industrial average <.DJI> was up 56.78 points, or 0.69 percent, at 8,242.51. The Standard & Poor's 500 Index <.SPX> added 7.20 points, or 0.82 percent, at 880.84. The Nasdaq Composite Index <.IXIC> rose 28.87 points, or 1.69 percent, at 1,740.81.

(Reporting by Ellis Mnyandu; editing by Jeffrey Benkoe)