U.S. stocks pared gains on Wednesday as a pullback in financial shares offset positive broker comments on bellwethers McDonald's and Procter & Gamble.

McDonald's Corp was the biggest boost to the blue-chip Dow, up 4.3 percent at $56.19 after Deutsche Bank upgraded the fast-food chain to buy. Procter & Gamble Co
added 2.9 percent to $54.44 after Barclays raised its rating to overweight from 'equal weight.

The KBW bank index <.BKX> fell 1.7 percent. Goldman Sachs Group Inc shed nearly 3 percent to $137.10.

The Dow Jones industrial average <.DJI> added 22.86 points, or 0.27 percent, to 8,497.71. The Standard & Poor's 500 Index <.SPX> gained 5.17 points, or 0.57 percent, to 913.30. The Nasdaq Composite Index <.IXIC> rose 14.11 points, or 0.81 percent, to 1,748.65.

Analysts said the recent sharp rally in stocks from bear market lows in March could have more to go if investors who missed the run-up jump in.

There is a lot of money on the sidelines and that has a lot to do with it, a lot of people that are latecomers to this rally, said Carl Birkelbach, chairman and chief executive of Birkelbach Investment Securities in Chicago.

This is not a done deal yet, and investors are starting to treat it like a done deal. There is still some pain to go through, said Birkelbach.

Shares of Deere & Co rose 3.5 percent to $45.36 despite reporting lower quarterly profit and a lower full-year earnings forecast.

Energy shares advanced as U.S. crude oil futures rose above $61 a barrel to touch a new six-month high amid bullish inventory data and a spate of U.S. refinery accidents. The PHLX Oil Service Sector index <.OSX> gained 3.2 percent.

U.S. Treasury Secretary Timothy Geithner said the Obama administration was making headway in settling down financial markets and said a program to cleanse so-called toxic assets from bank balance sheets will begin over the next six weeks.

The S&P 500 is up nearly 36 percent from the 12-year low on March 9 as investors become increasingly optimistic that the economy and financial system are stabilizing. Analysts cautioned that the positive sentiment will only be sustained once they see firmly improving data.

Minutes from the U.S. Federal Reserve's policy-setting meeting are to be released at 2:00 p.m. EDT (1800 GMT). Investors will watch for more clues on the economy.

No. 2 U.S. discount retailer Target Corp jumped 4.7 percent to $43.92 after its quarterly profit beat expectations as it tightened inventory and expenses.

Rival Wal-Mart Stores Inc , the world's largest retailer, saw shares gain 0.3 percent to $49.49.

In contrast, Hewlett-Packard Co , the world's top personal computer maker, was the Dow's biggest weight, down 4.9 percent at $34.79. After the close Tuesday, it gave a disappointing revenue forecast for the fiscal year and said it will cut 2 percent of its workforce.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)