* Manufacturing data inches closer to growth in July
* S&P 500 pops above 1,000 on fresh hopes of recovery
* Materials, energy and financials among standouts
* Dow up 1 pct; S&P 500 up 1.3 pct; Nasdaq up 1.1 pct (Updates to midday)
By Angela Moon
NEW YORK, Aug 3 (Reuters) - U.S. stocks rose on Monday after data showed the manufacturing sector edged closer to growth in July, while rising commodity prices boosted shares of natural resources companies.
The sharp advance briefly pushed the broader S&P 500 Index to its highest level in nine months above the psychologically important 1,000 level. On Friday, the S&P 500 wrapped up its best five-month streak since 1938.
Shares of U.S. automaker Ford Motor Co jumped 6.8 percent to $8.54 after it reported a 2 percent sales growth in July, the first year-over-year monthly gain since November 2007.
Ford is among the primary beneficiaries of the federal government's "Cash for Clunkers" incentive program that began on July 24.
The Institute for Supply Management said its index of national factory activity rose in July to 48.9, the highest since August 2008, from 44.8 in June. Economists polled by Reuters had forecast a July reading of 46.2. An ISM reading below 50 indicates contraction in manufacturing. The ISM index has not been above 50 since January 2008.
"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 of Zephyr Management in New York.
The Dow Jones industrial average rose 91.30 points, or 1.00 percent, to 9,262.91. The Standard & Poor's 500 Index gained 12.39 points, or 1.25 percent, to 999.87. The Nasdaq Composite Index shot up 21.99 points, or 1.11 percent, to 2,000.49.
The S&P 500 is now up nearly 48 percent since hitting a 12-year low on March 9.
Among natural resources companies' stocks, aluminum producer Alcoa Inc jumped 6.3 percent to $12.50, while miner Freeport-McMoran shot up 7.4 percent to $64.77. The S&P materials index was up 3.1 percent.
Shares of major U.S. banks got a boost after HSBC, the biggest European bank, reported a first-half 2009 profit that slightly exceeded expectations. Bank of America shares rose 3 percent to $15.23, while Citigroup gained 0.3 percent to $3.18.
Clorox Co's quarterly profit rose a stronger-than-expected 7.6 percent on Monday. But its stock, which has risen in recent weeks, fell 3 percent to $59.20.
Tyson Foods Inc also reported a much larger profit on Monday, but its shares shed 2.3 percent to $11.17.
Among the Nasdaq's major advancers, Apple Inc's shares rose 1.5 percent to $165.90 and Google Inc gained 1.8 percent to $451.17 after both companies mutually agreed on the need for Google CEO Eric Schmidt to resign from Apple's board.
On Monday, the U.S. Senate was due to vote on extending the program to stimulate auto sales after the U.S. House of Representatives approved $2 billion for it on top of an initial $1 billion in June. (Additional reporting by Ellis Mnyandu and Ryan Vlastelica; Editing by Jan Paschal)