* US, Chinese manufacturing data fuel recovery hopes

* GM files for bankruptcy, thrown out of the Dow

* Cisco and Travelers to join Dow industrials

* Dow and S&P 500 each up 2.6 pct; Nasdaq up 3.1 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates with after-hours drop in American Express and JPMorgan shares, more about the S&P 500 and GM, adds volume)

By Ellis Mnyandu

NEW YORK, June 1 (Reuters) - U.S. stocks rose on Monday, sending the S&P 500 to its highest close in seven months, as reassuring economic data reinforced hopes that demand will stabilize, while General Motors'GM.N long-expected bankruptcy filing ended uncertainty about the automaker's fate.

Data showing that the U.S. manufacturing sector contracted in May at a slower rate than expected fueled hopes the U.S. recession that began in December 2007 is moderating. (For details, double-click [ID:nN01259240]

Investors were also encouraged by signs of manufacturing stabilization from China, with demand from emerging markets for commodities and other resources seen leading a revival of global growth.