CORRECTED - US STOCKS-Market climbs back on new auto aid optimism

* Automakers surge amid optimism over bailout

* Buyers move in with bottom-fishing

* Jobless claims exacerbate economic jitters

* Dow up 1.2 pct, S&P up 0.4 pct, Nasdaq up 0.9 pct

* For up-to-the-minute market news, please click on STXNEWS/US (Fixes lowest since on Citigroup stock price in paragraph 11)

(Updates to early afternoon, changes byline)

By Charles Mikolajczak

NEW YORK, Nov 20 (Reuters) - U.S. stocks clawed back from multiyear lows on Thursday after hopes of a deal to rescue U.S. automakers were revived, offsetting growing concerns about the deepening economic downturn.

A group of senators said a bipartisan agreement had been reached on a bill to aid automakers, news that sent shares of General Motors (GM.N) shares up more than 15 percent to $3.29 on the New York Stock Exchange. Ford (F.N) was up more than 22 percent to $1.51. For details, see [nN20412216].

Earlier, the S&P 500 benchmark index had tumbled to a six-year low on worries about the carmakers' fate and the economic turmoil.

The big-three U.S. automakers, including Chrysler, are pressing for a $25 billion bailout from the government to avert possible bankruptcy.

The Dow Jones industrial average .DJI was up 96.29 points, or 1.20 percent, to 8,093.57. The Standard & Poor's 500 Index .SPX was up 3.68 points, or 0.46 percent, to 810.26. The Nasdaq Composite Index .IXIC was up 13.03 points, to 0.94 percent, at 1,399.45.

Earlier in the session, stocks had slid, taking the S&P 500 to its lowest level since October 2002 as another round of bleak economic data unnerved investors.

And not everyone was convinced that the auto rescue bill was going to be a lasting or comprehensive solution.

"Once the back and forth between the Big Three and Congress goes off the front pages next week, we'll be back into trying to figure out how deep and how long will this recession last," John Schloegel, vice president of investment strategies for Capital Cities Asset Management in Austin, Texas, said.

Data from the Labor Department showing that the number of new claims by U.S workers for jobless benefits hit their highest level in 16 years in the recent week moved investors to the sideline, along with concern about the future of Citigroup (C.N).