NEW YORK (Reuters) - US stocks climbed yesterday, with the S&P 500 and the Nasdaq up for a third straight day as a rare bit of encouraging news on the earnings front from companies, including American Express, offset fresh signs that consumers remain glum.

American Express jumped nearly 10 percent and gave the biggest boost to the Dow after the credit card company posted a quarterly profit that surpassed analysts' forecasts.

Chip maker Texas Instruments, up 3.7 percent at $15.31, gave the technology sector a welcome reprieve after its quarterly profit fell less than feared. The Philadelphia Semiconductor Index rose 3.5 percent, capping its first three-day run-up of 2009.

Analysts said investors were beginning to look beyond some of the gloomy news amid hopes about efforts to stabilise the economy.

"You've had such a fierce down market that when the news flow is okay, you're getting some sort of bounces," said David Katz, chief investment officer at Matrix Asset Advisors in New York. "In terms of American Express, people had braced themselves for a disaster. Although the numbers were poor, they weren't a disaster."

The Dow Jones industrial average rose 58.7 points, or 0.72 percent, to 8,174.73. The Standard & Poor's 500 Index gained 9.14 points, or 1.09 percent, to 845.71. The Nasdaq Composite Index advanced 15.44 points, or 1.04 percent, to 1,504.9.

After the closing bell, Moody's Investors Service said it may cut its top ratings on General Electric Co and its finance arm, citing increased uncertainty about outlook. The stock fell 4.6 percent to $12.46 in after-hours trading.

During the regular session, American Express shares rose 9.7 percent to $16.68. Shares of Citigroup jumped 6.6 percent to $3.55 after its chief executive reiterated his plan to cut costs.

Financials by far contributed the greatest boost to the broader market, sending the S&P financial index up 3.7 percent.

Worries about the financial sector's health have been the biggest hurdle for the market, fueling unease about stocks' performance in January, which is traditionally seen as a guide to the year's prospects.

Year to date, the benchmark S&P 500 is down 6.4 percent. After starting 2009 up more than 20 percent from its November 21 bear-market low, the index is now up 12.4 percent.

US Steel Corp added 6.9 percent to $31.49 after the steelmaker posted a more than eight-fold jump in quarterly profit.

On Nasdaq, shares of BlackBerry maker Research In Motion ranked as the top advancer, up 6.3 percent at $53.91, while shares of iPod and iPhone maker Apple Inc climbed 1.2 percent to $90.73.

The day's trading, however, was marked by a skittish tone as investors still had to contend with more signs of a weakening consumer. The Conference Board reported that its index of consumer confidence fell to a record low in January.

Additionally, home prices dropped at a record pace in November, according to data from an S&P/Case-Shiller.

Drags among consumer-oriented plays included Home Depot Inc., down 2.7 percent at $22.12, and rival home improvement chain Lowe's Cos., down 3.4 percent at $19.94.

The S&P retail index fell 1.3 percent, while the Dow Jones home construction index lost 2.4 percent.

The largest drag on the Dow came from Verizon Communications Inc, after the No. 2 US phone company reported fewer-than-expected wireless subscribers for the fourth quarter and warned that pension costs would hurt 2009 earnings. Verizon slid 3.3 percent to $29.96, while rival AT&T fell 3.4 percent to $25.93.

Delta Air Lines, down 20.1 percent at $7.93, was the NYSE's worst percentage decliner after the world's largest air carrier posted a quarterly loss.

The Federal Reserve's monetary policy-setting Federal Open Market Committee began a two-day policy meeting yesterday. Investors will watch for signals of any non-conventional methods of fighting the credit crisis at the meeting's conclusion today.

Volume was moderate on the New York Stock Exchange, where about 1.17 billion shares changed hands, below last year's estimated daily average volume of 1.49 billion shares, while on the Nasdaq, about 1.82 billion shares traded, below last year's daily average of 2.28 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about seven-to-three, while on the Nasdaq, about eight stocks rose for every five that fell.