NEW YORK (Reuters) - US stocks rose yesterday as lawmakers reached a compromise deal on a stimulus package, even as gold shot to a six-month high and government debt prices gained as investors expressed doubts about the US government's revamped plan to rescue ailing banks.

The dollar rose against the yen in choppy trade as the highly anticipated plan unveiled on Tuesday by US Treasury Secretary Timothy Geithner fell short of market expectations and drove up the appeal of safe havens.

US oil prices fell 4.3 percent after the International Energy Agency said global energy demand this year would post its biggest decline since 1982 due to the world's downturn.

US stocks rose to session highs at the close, boosted by a compromise deal that US lawmakers reached on a $789 billion package of tax cuts and spending aimed at reviving the flagging US economy. Voting could begin as early as today.

"The fact they were able to compromise was sufficient to get the market to take a breath after yesterday," said Marc Pado, US market strategist at Cantor Fitzgerald & Co. "That I think is what helped turn the market around."

The stock rally bucked a worldwide trend in equities, and the market was driven higher by financial shares that had been heavily beaten down a day earlier.

MSCI's all-country index fell 0.23 percent, while an index of Europe's leading companies and a pan-Asia index outside of Japan also declined.

The Dow Jones industrial average closed up 50.65 points, or 0.64 percent, at 7,939.53. The Standard & Poor's 500 Index added 6.58 points, or 0.8 percent, at 833.74. The Nasdaq Composite Index climbed 5.77 points, or 0.38 percent, at 1,530.5.

Shares of JPMorgan climbed six percent, making it a top boost to the Dow, while Citigroup added 10.2 percent and Bank of American gained 9.2 percent.

The S&P financial index advanced 5.2 percent, after an 11 percent slide on Tuesday, and the KBW Banks index advanced six percent, after Tuesday's nearly 14 percent slide.

US and euro zone government debt prices rose on worries about the effectiveness of the Treasury's bank rescue plan.

"There was a lot of disappointment behind the package, either because the measures weren't concrete enough or because they thought they hadn't tackled the root cause of the problem," said BNP Paribas analyst Michael Widmer.

"A lot of investors reassessed the risk in the market, and as risk aversion increased, it helped prices," said Widmer, referring to the steady rise in gold during the session.

Gold for April delivery rose 3.3 percent to settle up $30.30 at $944.50 in New York.

The benchmark 10-year US Treasury note rose 1?2 in price to yield 2.77 percent. The 30-year US Treasury bond rose 18/32 in price to yield 3.45 percent.

Other signs of risk aversion abounded.

The interbank cost of borrowing dollars over three months inched up as the outlook for the health of financial markets remained murky in the eyes of investors after Geithner failed to supply sufficient detail to calm widespread skittishness.

In European stocks, the FTSEurofirst 300 index of top European shares closed 0.3 percent lower at 803.37 points, the lowest close since February 3.

The drop was limited by a rally among pharmaceutical shares after Sanofi-Aventis posted better-than-expected results and investors cheered its new growth strategy. Sanofi gained eight percent.

"As long as we don't get signals that the bottom has been reached for consumer spending and on investment spending, stocks will remain very volatile and stuck in a bear market," said Alexandre Iatrides, a fund manager at KBL Richelieu.

The rally on Wall Street cut some of the dollar's gains as the economic stimulus plan reduced demand for the US currency as a safe-haven currency.

The dollar rose against a basket of major currencies, with the US Dollar Index up 0.24 percent at 85.775. Against the yen, the dollar rose 0.14 percent at 90.43.

The euro fell 0.01 percent at $1.2896.

US oil's losses came after the Paris-based IEA said in its monthly report that global oil demand would fall by 980,000 barrels per day in 2009, which would exceed its previous forecast for a 500,000 bpd contraction.