Wall Street jumps on recovery bets and GM; AmEx off late

By Ellis Mnyandu

NEW YORK (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' 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.

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.

"There's a potential for green shoots," said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm based in Toledo, Ohio, referring to signs of economic stabilization. "The best news has been the growth in China. Investors are betting on growth stimulus from the emerging markets."

The Dow Jones industrial average shot up 221.11 points, or 2.60 percent, to 8,721.44. The Standard & Poor's 500 Index gained 23.73 points, or 2.58 percent, to 942.87. The Nasdaq Composite Index jumped 54.35 points, or 3.06 percent, to 1,828.68.

After the bell, American Express Co , a Dow component, announced a plan to raise $500 million in a common stock public offering, driving its stock down 1.2 percent to $25.67 in extended-hours trading. American Express ended Monday's regular session up 4.6 percent at $25.99.

Also off late were shares of JPMorgan Chase & Co after the bank said it plans to raise $5 billion of common equity, which it said will enable it to repay this month the $25 billion it took from the government's bank bailout plan.

JPMorgan fell 0.9 percent to $35.79 after hours. It had ended regular NYSE trading down 2.1 percent at $36.11.