Stocks rose on Wednesday as data on home sales and manufacturing added to hopes that the economic slump was moderating, prompting investors to scoop up bank shares.
The data offset negative sentiment arising from a report showing job losses in the private sector accelerated in March, reviving worries of high unemployment, as well as fears that struggling automaker General Motors could be headed for bankruptcy.
Factory activity in March shrank, but at a slower pace than the month before, while pending sales of existing homes rose modestly in February, but the housing market remained weak as values continued to decline.
Private sector job losses rose more than expected, however, ADP Employer Services said, adding to jitters ahead of the government nonfarm payrolls report for March due on Friday.
I would call it somewhat encouraging. It's not a major improvement but it feels ... that the rate of decline is diminishing, said Jeffrey Saut, chief investment strategist at Raymond James Financial in St Petersburg, Florida.
I've been doing this for 38 years and it feels to me like the worm has turned.
Market watchers were also focused on the Group of 20 summit in London as leaders of the world's top economies meet to tackle the global economic crisis.
Shares of GM
The Dow Jones industrial average <.DJI> rose 55.83 points, or 0.73 percent, to 7,664.75. The Standard & Poor's 500 Index <.SPX> gained 5.19 points, or 0.65 percent, to 803.06. The Nasdaq Composite Index <.IXIC> added 8.98 points, or 0.59 percent, to 1,537.57.
The broad S&P was up more than 17 percent from 12-year lows hit in early March and on Tuesday closed out the month at its best since October 2002. The rally has been fueled by hopes that the economy is showing signs of stabilization.
Financial shares <.GSPF> turned around following the manufacturing and homes data to be the top boost on the S&P, gaining 1.4 percent. JPMorgan Chase
On the downside, Boeing
On Tuesday, GM said there was a rising chance it could file for bankruptcy by June. The comments came on the heels of the ouster of its Chief Executive Officer, Rick Wagoner, and details of the U.S. administration's plans limiting taxpayer funds for automakers.
While U.S. President Barack Obama played down differences between G20 leaders meeting in London, Germany and France demanded tough action rather than weak compromises, highlighting the difficulties in reaching an accord on staving off recession and tightening regulation.
On the Nasdaq, Celgene Corp
(Additional reporting by Edward Krudy; Editing by James Dalgleish)