Stocks rose on Wednesday as a broker upgrade of Caterpillar lifted big manufacturers, while biotechnology shares got a boost from better-than-expected results from Gilead Sciences.

Positive comments from company executives about the state of the global economy after a mixed bag of first-quarter results offset recent pessimism about the state of corporate profits.

Caterpillar Inc was the Dow's biggest boost, surging 8 percent to $33.86, after JP Morgan upgraded the construction equipment maker due to its improved balance sheet and liquidity.

Gilead Sciences Inc jumped 8.5 percent to $47.44 after quarterly profit beat estimates on increases sales of its drugs to treat the virus that causes AIDS.

Boeing Co boosted the Dow after the planemaker lowered its full-year outlook but the range was still above Wall Street's expectations, according to Reuters Estimates. Its net profit narrowed as the economic slowdown hurt orders. Its shares were up 2.1 percent at $37.42.

The market is looking ahead here to eventual economic stabilization and recovery and ignoring what happened in the first quarter as history, even when it's worse than expected, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

A little bit (of positive news) from some companies in their guidance where the tone is certainly not as bad -- the tone is cautious but optimistic.

The Dow Jones industrial average <.DJI> rose 68.02 points, or 0.85 percent, to 8,037.58. The Standard & Poor's 500 Index <.SPX> gained 9.81 points, or 1.15 percent, to 859.89. The Nasdaq Composite Index <.IXIC> pushed up 30.49 points, or 1.85 percent, at 1,674.34.

Home builder shares rose after data showed the prices of single-family homes were up in February. The Dow Jones home builders index <.DJUSHB> jumped 5 percent, and Pulte Homes Inc
gained 6.4 percent to $11.76.

Among the heavy-hitters reporting results on Wednesday, AT&T Inc rose 3.5 percent to $26.17 after profit fell less than expected on strong subscriber growth for its video and high-speed Internet service.

Wall Street recovered initial losses as financial shares reversed course to push higher. Wells Fargo & Co jumped 6.3 percent to $20.00 after posting a record profit as forecast, helped by a surge in mortgage refinancings.

But Morgan Stanley fell 2.4 percent to $24.06 after it posted its second straight quarterly loss and slashed its dividend.

Banks have helped lead the six-week rally that sent the broad S&P 500 up more than 26 percent from March's bear market lows.

On the downside, Exxon Mobil Corp and Chevron Corp were the top drags on the Dow as the price of oil briefly dipped below $48 a barrel as the International Monetary Fund cut its 2009 global growth forecast.

Exxon fell 1.4 percent to $65.31, and Chevron was down 0.6 percent to $64.52.

(Reporting by Leah Schnurr; additional reporting by Edward Krudy; editing by Jeffrey Benkoe)