Stocks rose on Wednesday amid numerous signs the recession could be abating and data from American Express signaled the ability of some consumers to pay their bills is stabilizing.

Intel Corp limited the Nasdaq's gains, however, saying economic uncertainty ruled out a clear revenue forecast and its stock fell 2.4 percent.

Financial stocks provided a major lift late in the session as American Express Co climbed almost 12 percent after defaults rose only slightly after months of deterioration.

Along with American Express, JPMorgan Chase & Co ranked among the Dow's biggest advancers as investors bet the bank will post robust quarterly results Thursday morning.

Hope that the economic slump was showing signs of abating rose after a report said manufacturing activity in New York State contracted less severely in April, while the Federal Reserve's Beige Book indicated the economy continued to weaken, but the contraction's speed was fading.

The Beige Book is feeding into the whole general picture of the market, said Carl Birkelbach, chairman and CEO of Birkelbach Investment Securities in Chicago.

It indicated that there would be negative things out there, but it also used the word bottoming, and that was positive.

After a choppy session, the Dow Jones industrial average <.DJI> gained 109.44 points, or 1.38 percent, to 8,029.62. The Standard & Poor's 500 Index <.SPX> rose 10.56 points, or 1.25 percent, to 852.06. The Nasdaq Composite Index <.IXIC> added 1.08 points, or 0.07 percent, to 1,626.80.

Procter & Gamble
also led the Dow higher after the maker of Tide laundry detergent and Crest toothpaste raised its dividend by 10 percent. P&G's stock shot up 3.2 percent to $48.75.

The S&P 500 is up nearly 26 percent from its bear market closing low on March 9 as it attempts its sixth-straight week of gains, but it is still down more than 5 percent for the year.

The rally was spurred by positive comments from some major banks and hopes that the economy was showing signs of stabilization, but those hopes were dented by Tuesday's unexpected drop in retail sales.

Indeed, the New York state manufacturing data contradicted a separate Federal Reserve report showing that industrial output at the nation's factories, mines and refineries dropped 1.5 percent in March.

JPMorgan gained 6.1 percent to $32.56 while the S&P financial index <.GSPF> gained 5.6 percent. JPMorgan was among the major banks to help spark the rally in March after saying they had made money in January and February, although the bank's Chief Executive Jamie Dimon indicated March had been a little tougher.

A Dow Jones index of home builders' shares <.DJUSHB> rose 6 percent after data showed home builder sentiment rose in April to its highest level since last October. Among the gainers, Lennar Corp gained 11.7 percent to $8.69.

In another sign of improved sentiment, the CBOE Volatility Index <.VIX>, considered to be Wall Street's fear gauge, closed at its lowest level since the end of September.

On the downside Intel Corp lost 2.4 percent to $15.62 and kept the Nasdaq in negative territory for most of the day.

(Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)