* Global manufacturing data buoys markets
* General Mills sees solid profit, stock jumps
* Dollar's drop lifts multinational, commodity companies
* Dow up 1 pct, S&P 500 up 0.7 pct, Nasdaq up 0.7 pct (Updates to late afternoon)
By Ellis Mnyandu
NEW YORK, July 1 (Reuters) - U.S. stocks rose on Wednesday, the first day of the third quarter, as investors took reassuring manufacturing data from China, Europe and the United States as signaling the world's economy is on the road to recovery.
A day after the S&P 500 wrapped up its best quarter in a decade, investors plowed new money into stocks, boosting growth-sensitive sectors like energy, industrials, technology, materials and consumer discretionaries.
A weaker U.S. dollar prompted investors to buy the stocks
of some multinational companies such as Coca-Cola
"We think the economy has bottomed out and we'll see some positive GDP this quarter," said Maury Fertig, chief investment officer of Relative Value Partners in Northbrook, Illinois.
"The one thing that really give us a lot of comfort is a tremendous improvement in the credit markets."
Even so, volume was light because of the absence of most market players in a holiday-shortened week. U.S. financial markets will be closed on Friday for the U.S. Independence Day holiday.
The Dow Jones industrial average rose 81.09 points, or 0.96 percent, to 8,528.09. The Standard & Poor's 500 Index gained 6.39 points, or 0.70 percent, to 925.71. The Nasdaq Composite Index added 13.02 points, or 0.71 percent, to 1,848.06.
Heading toward the close, some apprehension about Thursday's release of June non-farm payrolls data crept into the market, causing indexes to pare some gains.
General Mills Inc, the maker of Cheerios cereal, also gave investors more reason to be optimistic about the economy after the food company forecast a stronger-than-expected annual profit, sending its stock up 4.3 percent to $58.43.
Kraft Foods Inc, another major U.S. food company, jumped 5.3 percent to $26.68.
In the latest readings on the global economy, surveys from Europe showed manufacturing was shrinking less than initially thought and in China's case, growing modestly.
Other data on Wednesday showed the U.S. manufacturing sector contracted in June but at a slower pace than in May. The Institute for Supply Management said its index of national factory activity edged up to 44.8 to in June from 42.8 in May.
Additionally, global outplacement consultancy Challenger, Gray & Christmas data showed planned layoffs at U.S. firms fell to a 15-month low in June.
That news, coming a day before the release of the government's June non-farm payrolls report, eclipsed the ADP Employer Services payroll survey showing that private employers cut 473,000 jobs in June.
The forecast for U.S. job losses in June was increased to 363,000 on Wednesday, a steeper estimate than the 355,000 originally forecast.
Prospects for a better world economy lifted commodity
prices, boosting stocks in natural resource companies,
including miners, with Newmont Mining Corp
Shares of Chevron Corp rose 0.5 percent to $66.56, while Exxon Mobil added 1.1 percent to $70.71. Both stocks were off their best levels, however, after crude oil futures reversed an initial climb that sent them above $71 a barrel earlier on Wednesday.
U.S. front-month crude slipped 58 cents to settle at $69.31 a barrel, after rising as high as $71.85 earlier. (Editing by Jan Paschal)