U.S. stocks rallied on Wednesday after strong jobs data raised hopes that the global credit crisis may not be hurting economic growth as much as has been feared, driving the three major indexes up 1 percent.
Shares of insurer American International Group surged 7 percent after the company said on Wednesday its exposure to the housing and credit crisis was "manageable." For details, see [ID:nN05605251].
Manufacturers and energy producers, as well as other stocks sensitive to the economic cycle, rose on signs of better-than-expected job growth and expansion in the service sector.
Signs that the economy is not ailing as much as has been thought caused investors to cut back expectations of the extent of an interest rate cut when the Federal Reserve meets next Tuesday.
"Today the market went up because people think the Fed won't need to ease as much," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "The first step in getting better is for the patient to get out of the bed and walk on its own without the Fed I.V. drip."
The market has widely expected the Fed would cut short-term rates by at least a quarter-percentage point, but many investors recently had speculated it would have to cut rates more aggressively.
The Dow Jones industrial average .DJI was up 169.40 points, or 1.28 percent, at 13,418.13. The Standard & Poor's 500 Index .SPX was up 19.91 points, or 1.36 percent, at 1,482.70. The Nasdaq Composite Index .IXIC was up 46.15 points, or 1.76 percent, at 2,665.98.
Shares of AIG were up 6 percent at $58.80 on the New York Stock Exchange.
Shares of diversified manufacturer United Technology Corp (UTX.N: Quote, Profile, Research) shares rose 2.7 percent to $76.78 and Honeywell International (HON.N: Quote, Profile, Research) added 2.2 percent to $57.86. Shares of Chevron (CVX.N: Quote, Profile, Research) were up 2.2 percent to $89.04.
The ADP National Employment Report showed the private sector added more than three times the number of jobs economists had forecast. The report is seen as a harbinger of the government's November payrolls data due on Friday.
The Labor Department said revised third-quarter non-farm output rose at its fastest pace in four years, while unit labor costs, a measure of inflation, showed the largest decline in four years.
In addition, the Institute for Supply Management said its non-manufacturing index, which measures activity among services companies, showed expansion in the sprawling sector.
Among decliners, Comcast (CMCSA.O: Quote, Profile, Research) shares fell 10.4 percent to $18.57 after the largest U.S. cable television operator lowered its forecast for 2007 cable revenue growth.
Shares of insurer American International Group surged 7 percent after the company said on Wednesday its exposure to the housing and credit crisis was "manageable." For details, see [ID:nN05605251].
Manufacturers and energy producers, as well as other stocks sensitive to the economic cycle, rose on signs of better-than-expected job growth and expansion in the service sector.
Signs that the economy is not ailing as much as has been thought caused investors to cut back expectations of the extent of an interest rate cut when the Federal Reserve meets next Tuesday.
"Today the market went up because people think the Fed won't need to ease as much," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "The first step in getting better is for the patient to get out of the bed and walk on its own without the Fed I.V. drip."
The market has widely expected the Fed would cut short-term rates by at least a quarter-percentage point, but many investors recently had speculated it would have to cut rates more aggressively.
The Dow Jones industrial average .DJI was up 169.40 points, or 1.28 percent, at 13,418.13. The Standard & Poor's 500 Index .SPX was up 19.91 points, or 1.36 percent, at 1,482.70. The Nasdaq Composite Index .IXIC was up 46.15 points, or 1.76 percent, at 2,665.98.
Shares of AIG were up 6 percent at $58.80 on the New York Stock Exchange.
Shares of diversified manufacturer United Technology Corp (UTX.N: Quote, Profile, Research) shares rose 2.7 percent to $76.78 and Honeywell International (HON.N: Quote, Profile, Research) added 2.2 percent to $57.86. Shares of Chevron (CVX.N: Quote, Profile, Research) were up 2.2 percent to $89.04.
The ADP National Employment Report showed the private sector added more than three times the number of jobs economists had forecast. The report is seen as a harbinger of the government's November payrolls data due on Friday.
The Labor Department said revised third-quarter non-farm output rose at its fastest pace in four years, while unit labor costs, a measure of inflation, showed the largest decline in four years.
In addition, the Institute for Supply Management said its non-manufacturing index, which measures activity among services companies, showed expansion in the sprawling sector.
Among decliners, Comcast (CMCSA.O: Quote, Profile, Research) shares fell 10.4 percent to $18.57 after the largest U.S. cable television operator lowered its forecast for 2007 cable revenue growth.
