hwy120

Stocks Rise on Optimism for Strengthening Economy

Amid what appears to be strengthening economic growth, the Federal Reserve said it stands ready to take action if necessary. Stocks rose earlier after a private report based on payrolls showed U.S. companies added workers in October. Also, phone stocks gained after the U.S. House voted to bar new state and local taxes on wireless services.

Stocks rose Wednesday, following a two-day drop in the Standard & Poor's 500 index, as the Federal Reserve said economic growth strengthened and it is prepared to take action if necessary to safeguard the recovery.
The S&P rose 19.62 points, or 1.6 percent, to 1237.90 after dropping 5.2 percent the previous two days. The Dow Jones industrial average added 178.08 points, or 1.5 percent, to 11,836.04. The Nasdaq composite index added 33.02 points, or 1.3 percent, to 2639.98

"People are focused on two comments: The economy has firmed and the Fed stands ready to take action," says Mark Bronzo, money manager at Security Global Investors. "In addition, the fact that they are not taking action now makes you more comfortable that the economy is doing OK."

Federal Reserve Chairman Ben Bernanke said additional purchases of mortgage-backed securities are a "viable option" if economic conditions warrant further easing.

Fed policymakers repeated that "there are significant downside risks" to the outlook and cut 2012 growth forecasts. Bernanke and his colleagues on the panel said unemployment will average 8.5 percent to 8.7 percent in the final three months of next year, up from a prior range of 7.8 percent to 8.2 percent.

Stocks rose earlier after a private report based on payrolls showed U.S. companies added workers in October. The 110,000 increase followed a revised 116,000 gain the prior month that was larger than previously estimated, ADP Employer Services said. The median forecast of economists surveyed by Bloomberg News called for an advance of 100,000.

European leaders racing to prevent their week-old debt crisis strategy from unraveling convene emergency talks today to tell Greece there is no alternative to the budget cuts imposed in the bailout plan. Greek Prime Minister George Papandreou, his hold on power weakening, was summoned to Cannes, France, on the eve of a Group of 20 summit where he will hear from French President Nicolas Sarkozy that the "only way to resolve Greek debt problems" is through a deal hammered out last week.

Papandreou triggered the latest upheaval in the 2-year-old crisis by abruptly announcing on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact.

Highlights: Phone stocks gained after the U.S. House voted to bar new state and local taxes on wireless  services. Sprint Nextel climbed 23 cents, or 9.2 percent, to $2.72. MetroPCS jumped 91 cents, or 11.9 percent, to $8.57. Verizon rose 33 cents, or 0.9 percent, to $36.80. AT&T  added 38 cents, or 1.3 percent, to $29.08.

Wireless Business Solution Zee Tawasha