U.S. stocks rose on Monday after data showed the manufacturing sector shrunk at a slower pace in July, while rising commodity prices boosted natural resource stocks.

The sharp advance briefly pushed the broader S&P 500 Index <.SPX> to its highest level in nine months, above the psychologically important 1,000 level.

Ford Motor Co's July sales jumped 2 percent, adding to the positive tone.

According to the Institute for Supply Management, its index of national factory activity rose to 48.9 in July from 44.8 in June. A Reuters survey of economists had forecast 46.2.

The ISM data adds to the building case that the economy has stabilized and that it is going to grow this quarter. I imagine it will embolden the case of the bulls, said Jim Awad, managing director at Zephyr Management in New York.

The Dow Jones industrial average <.DJI> rose 81.70 points, or 0.89 percent, to 9,253.31. The Standard & Poor's 500 Index <.SPX> gained 9.80 points, or 0.99 percent, to 997.28. The Nasdaq Composite Index <.IXIC> shot up 15.06 points, or 0.76 percent, to 1,993.56.

The S&P 500 is now up 47.4 percent since hitting a 12-year low on March 9.

Among natural resource stocks, shares of aluminum producer Alcoa Inc jumped 6 percent to $12.46, while miner Freeport-McMoran Inc shot up 7.7 percent. The S&P materials index <.GSPM.N> was up 2.8 percent.

Ford shares rose 7.1 percent to $8.54. The company is among the primary beneficiaries of the federal government's Cash for Clunkers incentive program that took effect on July 24.

The Senate on Monday was due to vote on extending the program to stimulate auto sales after the U.S. House approved $2 billion for it on top of an initial $1 billion in June.

3M Co shares rose 2 percent to $71.95 after Goldman Sachs upgraded the Dow component to buy from neutral.

(Additional reporting by Ellis Mnyandu and Ryan Vlastelica; Editing by Padraic Cassidy)