US STOCKS-Market leaps into Q3 on recovery bets, General Mills

* 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

* For up-to-the-minute market news click [STXNEWS/US]
(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 (KO.N), up
2.8 percent at $49.31, as investors bet the U.S currency's
decline might boost overseas earnings.

"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 .DJI rose 81.09 points,
or 0.96 percent, to 8,528.09. The Standard & Poor's 500 Index
.SPX gained 6.39 points, or 0.70 percent, to 925.71. The
Nasdaq Composite Index .IXIC 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 (GIS.N), 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. For details, see [ID:nBNG512328]

Kraft Foods Inc (KFT.N) , 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.
[ID:nPEK138883]

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.
[ID:nN01366244]

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 (NEM.N) up almost
3.5 percent at $42.31.

Shares of Chevron Corp (CVX.N) rose 0.5 percent to $66.56,
while Exxon Mobil (XOM.N) 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 CLc1 slipped 58 cents to settle
at $69.31 a barrel, after rising as high as $71.85 earlier.
(Editing by Jan Paschal)