Wall St closes out 09 with best gains since 2003

NEW YORK (Reuters) – U.S. stocks ended 2009 on Thursday with their best gains since 2003, driven by optimism about the economy's recovery and a brighter outlook for profits.

The benchmark Standard & Poor's 500 index rose 23.5 percent for the year, while the Dow climbed 18.8 percent and the Nasdaq jumped 43.9 percent from its close on December 31, 2008.

It was the market's first annual advance in two years. In 2008, the S&P 500 slid 38.5 percent when the economic crisis led to Wall Street's worst year since the Great Depression.

For Thursday's session alone, though, U.S. stocks declined, with a late-day sell-off pushing all three major indexes down about 1 percent as investors sold some of the year's best-performing stocks to lock in some of 2009's substantial gains.

Most of the year's advance is the result of a nine-month rally, led by gains in technology and materials shares on expectations the economic recovery will spur capital spending and increase demand for energy, metals and other natural resources.

"It really was a turnaround year," said Charles Lieberman, chief investment officer of Advisors Capital Management, LLC in Paramus, New Jersey. "It shows how much of a recovery there's been."

American Express (AXP.N), Microsoft (MSFT.O) and IBM (IBM.N) were the Dow's top gainers for the year. All three ended Thursday lower, however.

On the other hand, General Electric (GE.N), long considered a bellwether, finished second to last among the Dow components in terms of 2009 performance, with big oil producer Exxon Mobil Corp (XOM.N) in last place.

A LIFT FROM EARNINGS

Signs of an economic rebound, including more than 70 percent of companies beating profit expectations in the second quarter, have driven the S&P 500 up 65 percent since its March 9 closing low. The dollar's weakness throughout much of 2009 also gave the market a strong boost on hopes about exports.

Despite optimism about 2009, Wall Street registered its first-ever negative decade on a total return basis even with dividends reinvested. The S&P 500 is down about 10 percent for the decade, on that basis.

After a fast sell-off late in the session, the Dow Jones industrial average (.DJI) ended down 120.46 points, or 1.14 percent, at 10,428.05. The Standard & Poor's 500 Index (.SPX) slid 11.32 points, or 1.00 percent, at 1,115.10. The Nasdaq Composite Index (.IXIC) lost 22.13 points, or 0.97 percent, to close at 2,269.15.

U.S. financial markets will be closed on Friday for New Year's Day.

WINNING QUARTER, LOSING WEEK

For the fourth quarter, the Dow rose 7.5 percent, the S&P 500 gained 5 payday loan lenders.5 percent and the Nasdaq jumped 6.9 percent.

But for the week, the Dow was off 0.9 percent, the S&P 500 was down 0.4 percent and the Nasdaq fell 0.7 percent.

The S&P 500's top-performing stock for the year was XL Capital (XL.N) -- up an eye-popping 395.4 percent in 2009. On Thursday, however, XL Capital's stock slipped 0.4 percent to end at $18.33 on the New York Stock Exchange.

Citigroup (C.N), down 50.7 percent for the year, was among the worst performers in the S&P 500.

IBM rose 55.5 percent for the year, Microsoft gained 56.8 percent in 2009 and American Express jumped 118.4 percent. For the day, IBM fell 1.3 percent to $130.90, Microsoft dropped 1.6 percent to $30.48 and American Express declined 0.7 percent to $40.52.

S&P OFF 29 PERCENT FROM RECORD CLOSE

Analysts see further upside in stocks in 2010 if the recovery proves sustainable. The U.S. unemployment rate is still at 10 percent -- a 26-year high.

The Dow is down 26 percent from its record closing high on October 9, 2007, while the S&P 500 is down 29 percent from its record close on that same date. The Nasdaq is down 55 percent from its March 10, 2000, closing high. A drop of 20 percent or more technically signifies a bear market.

"I don't think we're overbought," Lieberman said.

Emerging markets performed better than the United States and other developed markets, with China's key stock index ending with an 80 percent gain and Brazil's stock market up 83 percent for the year.

The S&P information technology sector (.GSPT) is up 59.9 percent for the year, while the S&P materials sector (.GSPM) is up 45.2 percent.

Telecommunications (.GSPL) was the worst-performing S&P 500 sector, with a gain of just 2.6 percent for the year, followed by utilities (.GSPU), up 6.8 percent.

Adding to Thursday's bearish tone, the December reading of the Institute for Supply Management-Chicago index, also known as the PMI or purchasing managers' index, was revised downward from the level reported on Wednesday.

Volume was light, with many investors out for the holidays. Just 679.9 million shares traded on the NYSE, well below last year's daily closing average of 1.49 billion.

On Nasdaq, about 1.27 billion shares traded, also sharply below last year's daily average of 2.28 billion.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of 2 to 1, while on the Nasdaq, about 17 stocks fell for every 10 that rose.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

Wall St closes out '09 with best gains since 2003

Wall Street dips as investors reap profits

NEW YORK (Reuters) – Stocks edged lower on Wednesday as investors took profits in some of the year's better performers, offsetting a much better-than-expected report on Midwest business activity.

Companies including Microsoft Corp (MSFT.O), which is up 59 percent since the year's start, was among the biggest drags on the Dow and the Nasdaq. The stock slipped 1.6 percent to $30.88.

Shares of Oracle Corp (ORCL.O), up 40 percent since the start of the year, was down 0.4 percent at $24.91.

"We've had such a nice run up over the last two weeks that I think the best-case scenario is probably baked into stock prices at this point. I wouldn't be surprised if people wanted to take some money off the table," now that year end is approaching, said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

Among economic data, the Institute for Supply Management-Chicago business barometer surged to a four-year high, topping forecasts, on a recovery in employment and accelerating new orders.

Shares of DuPont (DD.N) was up 0.4 percent at $34.03.

While investors looked to the data for signs a recovery is taking hold, some traders have moved to safer assets like the dollar to lock in profits after a strong 2009.

The U.S. dollar hit a three-month high against the yen on year-end flows in thin trade and views the U no fax payday advances.S. economy is on the road to recovery.

The Dow Jones industrial average (.DJI) was down 10.50 points, or 0.10 percent, at 10,534.91. The Standard & Poor's 500 Index (.SPX) was down 2.17 points, or 0.19 percent, at 1,124.03. The Nasdaq Composite Index (.IXIC) was down 4.43 points, or 0.19 percent, at 2,283.97.

In Tuesday's session, indexes ended modestly lower and snapped a six-day streak of gains.

The Nasdaq Times Square, New York, building was briefly evacuated because of an investigation of a suspicious vehicle near the building, but Nasdaq said trading was not affected.

Semiconductor stocks gained after Kaufman Bros upgraded both Marvell Technology Group Ltd (MRVL.O) and Nvidia Corp (NVDA.O) to "buy," saying they could benefit from improved demand for personal computers.

The Philadelphia Semiconductor index (.SOXX) gained 1.2 percent, while Marvell added 2.3 percent to $20.72 and Nvidia shot up 3.7 percent to $18.70, both in Nasdaq trading.

(Reporting by Caroline Valetkevitch; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)

Wall Street dips as investors reap profits

O2 says iPhone demand strained London network

LONDON (Reuters) – Apple's (AAPL.O) data-hungry iPhone at times overwhelmed operator O2's network in London during the last six months but additional capacity helped ease the problem by December, O2 said on Tuesday.

O2, which is owned by Spain's Telefonica (TEF.MC), said some customers in the capital had periodically not been able to make or receive calls or transmit data because of pressure on the network from smartphones such as the iPhone.

O2, whose exclusive contract to market the Apple handset in the UK expired in November, had seen an 18-fold increase in data traffic since the start of the year, a spokesman said.

Chief Executive Ronan Dunne told the Financial Times on Tuesday: "Where we haven't met our own high standards then there's no question, we apologize to customers for that fact."

"But it would be wrong to say O2 has failed its customers en masse."

O2's network has suffered a spate of crashes since the summer, when it said it was seeing a huge surge in data traffic.

The company had invested 30 million pounds ($48 million) in its London network to meet demand, the spokesman said, and 200 extra mobile base stations had been installed payday advance.

O2 is not alone in finding its network stretched by iPhone users, who have some of the largest appetites for downloading applications, surfing the Internet and using email.

AT&T temporarily stopped selling the iPhone on its website to New York City residents over the weekend, causing speculation that the operator may have been trying to ease congestion on its network.

O2 said it did not encounter any problems over the Christmas period.

Orange, owned by France Telecom (FTE.PA), started selling the phone in the UK in November, while retailer Tesco (TSCO.L) launched an iPhone service earlier this month.

Vodafone (VOD.L), the world's largest mobile operator by revenue, will join the iPhone battle in Britain and Ireland on Jan 14.

(Reporting by Paul Sandle; Editing by Erica Billingham)

O2 says iPhone demand strained London network

Asian shares up on economy outlook, dollar hovers

SINGAPORE (Reuters) – Asian stocks rose on Monday on increasing optimism about the global economy, with Tokyo shares hitting their highest in four months, while the U.S. dollar gained against the yen and held firm against the euro.

Signs of a recovery in the United States also lifted oil prices to a four-week high.

The MSCI index of Asia Pacific stocks outside Japan rose almost 0.7 percent in thin trade as markets in Australia and New Zealand remained shut for holidays.

The Thomson Reuters index of Asia ex-Japan equities was up 0.6 percent.

Chinese stocks led the regional gains, with the Shanghai Composite Index jumping 1.7 percent, lifted by Premier Wen Jiabao's comments on Sunday that Beijing was committed to seeing through its stimulus package to help cement the economic recovery.

The Shanghai index has gained 5 percent after falling to a seven-week low on Tuesday, as investors were encouraged by a series of data suggesting the world's third largest economy is on a brisk recovery path.

Japan's Nikkei average (.N225) rose 1 percent to its highest in four months on data showing factory output rising for the ninth straight month in November and on stable currency moves.

"The industrial output data was stronger than what the market had expected and that's reinforcing the positive sentiment. The stable dollar/yen moves are also making it easier to pick up exporter shares," said Tsuyoshi Segawa, equity strategist at Mizuho Securities.

Japan's industrial output rose a more-than-expected 2.6 percent in November, the strongest gain in six months as rising exports to Asia bode well for a recovering economy emergency cash loans.

That followed upbeat U.S. data on Thursday which showed a drop in initial jobless claims and growth in durable goods orders.

In China, industrial profits nationwide rose 7.8 percent in the first 11 months from a year earlier, compared with a fall of 10.6 percent in the first eight months of the year.

U.S. and European markets were shut on Friday for Christmas

after closing at their highest in over a year on Thursday.

The dollar was at 91.66 yen. It ended at around 91.50 yen on Thursday, below a two-month high of 91.88 yen set last week as investors covered short dollar positions before the year-end.

The euro rose 0.2 percent to $1.4355, after climbing to a session peak of $1.4418, according to Reuters data.

The euro is down 4.3 percent against the dollar so far this month and on course for its biggest monthly fall since January, dented by concerns about sovereign ratings after a third ratings agency downgraded Greece's debt.

U.S. crude oil for February delivery gained 55 cents, or 0.6 percent, to $78.60 a barrel, highest since December 1 supported also by large declines in U.S. crude inventories.

Gold prices gained up 0.9 percent to $1,113.45 in thin trade as many investors stayed to sidelines after U.S. and European markets were closed for Christmas.

(Editing by Kazunori Takada)

Asian shares up on economy outlook, dollar hovers

Hot News: Stocks to wrap up 2009 on high note

Euro zone deficits must be cut from 2011 latest: Trichet

BERLIN (Reuters) – Banks must provide sufficient credit and governments in the euro zone must reign in public finances to support a global economic recovery in 2010, the President of the European Central Bank (EBC) said on Sunday.

In comments made to the Bild am Sonntag weekly newspaper, Jean-Claude Trichet added that recovery from the financial crisis required concerted effort to offset joblessness.

"Banks must perform their central role in the supply of credit to the economy... Handling the consequences of the crisis for the labor market and public finances represents an additional challenge guaranteed approval cash loans."

"Budget deficits in the euro area must be reduced by 2011 at the latest -- in some countries as early as 2010 -- in order to maintain confidence in public finances," he said.

(Writing by Brian Rohan; Editing by Matthew Jones)

Euro zone deficits must be cut from 2011 latest: Trichet

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Lyondell seeks settlement, touts creditor support

WILMINGTON, Delaware (Reuters) – Lyondell Chemical Co asked a bankruptcy court on Thursday to approve a proposed settlement among warring creditors and said its secured lenders committed to support its plan of reorganization.

Under the previously announced proposal, secured lenders would pay $300 million to unsecured creditors, who brought a $22 billion lawsuit against the banks and advisers that put together Lyondell's leveraged buyout in 2007.

The proposal also establishes a fund that can be used to pursue claims against any secured lenders that did not participate in the settlement.

The company also said on Thursday secured lenders were committed to supporting its plan to emerge from bankruptcy.

"We confirm through these support agreements that virtually every in-the-money constituent will support the fundamental structure of the plan converting the secured debt to equity," said Lyondell spokesman David Harpole.

But Thursday's request for the court to approve the proposed settlement did little to soften unsecured creditors' opposition.

"The settlement is an abomination and we plan to oppose it vigorously," said Ed Weisfelner, a lawyer with Brown Rudnick, which represents unsecured creditors.

The chemical company also filed a request with the bankruptcy court in Manhattan for approval of a previously announced plan to sell $2.8 billion in stock in the reorganized company.

The stock is being offered to secured lenders who will end up owning the reorganized company and the sale is being backstopped by investment firms Apollo Management (APOLO.UL), Ares Management and a unit of Access Industries, Lyondell's current owner sam day payday loan.

Lyondell Chemical said in a statement that the equity offering did not prevent it from considering other proposals to acquire the company upon its emergence from Chapter 11 bankruptcy.

Unsecured creditors asked the bankruptcy court this week to allow a court-appointed examiner to ensure that potential bidders such as India's Reliance Industries (RELI.BO) have a chance to compete against senior creditors for the company.

Reliance Industries has offered up to $12 billion to acquire Lyondell, according to sources.

Lyondell's unsecured creditors said in court papers they believe Reliance's offer is superior to the one proposed by Access, Ares and Apollo.

Lyondell said its plan remains the best option.

"We believe this plan we have filed is in the best interests of the estate and the parties in this case," said Harpole.

Lyondell is a U.S. unit of LyondellBasell (ACCEIN.UL), which filed for bankruptcy protection after being unable to meet its debt obligations when demand dropped for petrochemical products during the global economic downturn.

LyondellBasell, a Luxembourg-based holding company, is owned by investor Len Blavatnik through New York-based Access Industries. Lyondell took on billions of dollars of debt when Access Industries led a 2007 buyout of the petrochemicals company.

(Additional reporting by Emily Chasan in New York and Santosh Nadgir in Bangalore; Editing by Maureen Bavdek and Tim Dobbyn)

Lyondell seeks settlement, touts creditor support

Stock futures signal gains ahead of Xmas break

(Reuters) – U.S. stock index futures pointed to a higher open on Wall Street on Thursday, with futures for the S&P 500 up 0.22 percent, Dow Jones futures up 0.15 percent and Nasdaq 100 futures up 0.23 percent at 3:33 a.m.

The New York Stock Exchange will close at 1 p.m. EST on Thursday for Christmas Eve and will be closed on Friday for Christmas.

Shares in healthcare companies will be in the spotlight as the U.S. Senate is poised to approve President Barack Obama's healthcare overhaul on Thursday. The Senate votes at 7 a.m. EST on the healthcare bill after four weeks of debate and months of political wrangling that have consumed the U.S. Congress and put a dent in Obama's public approval ratings.

Japan's Nikkei average (.N225) rose 1.5 percent to post a three-month closing high on Thursday as a weaker yen boosted exporters, while the few European stock markets open on Thursday were mostly flat in a shortened session ahead of the Christmas break.

Oil rose above $77 on Thursday, after surging more than 3 percent the previous day, lifted by a deeper-than-forecast drop in crude and fuel stocks in the world's top energy consumer and as the dollar paused companies making payday loans.

Economic data on tap for Thursday includes durable goods for November and weekly initial jobless claims.

Chevron Corp (CVX.N) has agreed to pay almost $46 million to settle charges it underpaid royalties owed for natural gas produced from federal and Indian leases, the Justice Department said on Wednesday.

U.S. Technology shares rose on Wednesday after solid earnings from Micron Technology and Red Hat, but an unexpected drop in new home sales kept a lid on the broader market's gains.

The Dow Jones industrial average (.DJI) inched up 1.51 points, or 0.01 percent, at 10,466.44. The Standard & Poor's 500 Index (.SPX) added 2.57 points, or 0.23 percent, to 1,120.59. The Nasdaq Composite Index (.IXIC) climbed 16.97 points, or 0.75 percent, to 2,269.64.

(Reporting by Blaise Robinson; Editing by David Cowell)

Stock futures signal gains ahead of Xmas break

Hot News: Citigroup, Wells Fargo repay TARP funds

U.S.-China trade engagement produces concrete results: USTR

WASHINGTON, Dec. 22 (Xinhua) -- The U.S. government saw trade relation with China "produced concrete results" in 2009 and is optimistic of progress in 2010, according to a report released by the U.S. Trade Representative's office on Tuesday.

"Bilateral engagement produced concrete results in a number of important areas in 2009," the U.S. Trade Representative's office (USTR) said in its eighth annual report to the Congress on how well China is complying with its World Trade Organization obligations. "The two sides were able to resolve significant trade irritants, while also achieving incremental but important progress in other areas."

On the bilateral front, the United States and China pursued a robust set of formal and informal meetings and dialogues in 2009, including numerous working groups and high-level meetings.

The two governments held their first Strategic and Economic Dialogue (S&ED) meeting in July 2009 and the 20th meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT) in October 2009.

The report, the first issued by President Barack Obama's administration, said that "the United States is optimistic that significant progress is obtainable in 2010."

"China has taken many impressive steps over the last eight years to reform its economy, while implementing a set of sweeping WTO accession commitments," the report said.

"China's implementation of its WTO commitments has led to increases in U.S. exports to China, while deepening China's integration into the international trading system and facilitating and strengthening the rule of law and the economic reforms that China began 30 years ago guaranteed payday loan."

Since China's accession to the WTO in 2001, U.S. exports of goods to China have increased by nearly 270 percent, rising from a 2001 total of 19 billion dollars to 70 billion dollars in 2008, said USTR.

While U.S.-China trade slowed in 2009 like trade in the rest of the world in the face of the global economic downturn, China remains the third largest goods export market of the United States. China is also a substantial market for U.S. services, as the cross-border supply of services totaled 16 billion dollars in 2008.

"Despite the many remaining challenges, China's WTO membership has continued to provide substantial ongoing benefits to the United States."

"U.S.-China trade has expanded dramatically, providing numerous and substantial opportunities for U.S. businesses, workers, farmers and service suppliers and a wealth of affordable goods for U.S. consumers," said the report.

Although progress has been made, trade disputes remain between the world's two major trade partners.

The U.S. government filed many dispute cases against China in 2009, which aroused critics about the Obama administration's protectionism.

USTR said it preferred to resolve disputes with China through dialogue, but would not hesitate to take action at the WTO if necessary.

The U.S. trade deficit with China is expected to fall this year, along with the overall slump in world trade.

U.S.-China trade engagement produces concrete results: USTR

Freddie Mac: Director will not seek re-election

MCLEAN, Va. – Mortgage finance company Freddie Mac said Monday that one of its directors, Barbara T. Alexander, will not seek re-election when her term expires in March 2010.

Alexander first joined the board in 2004. She was one of three directors the Federal Housing Finance Agency asked to remain on the board after the company was placed into conservatorship in September 2008.

Freddie Mac said in a release that Alexander was instrumental in helping recruit additional board members and a new senior management team while the company was in conservatorship. She currently chairs the business and risk committee and serves on the compensation and executive committees best payday loan. She will continue to serve in those roles through the company's board meeting on March 19, 2010, Freddie Mac said.

Alexander has been an independent consultant since 2004. She is a member of the board of directors of Allied World Assurance Co. and Qualcomm Inc. She is also an executive fellow at the Joint Center for Housing Studies at Harvard University.

Board chairman John A. Koskinen will lead the search for Alexander's successor.

Shares of Freddie Mac rose 3 cents to $1.33 in afternoon trading.

Freddie Mac: Director will not seek re-election

OPEC to keep oil supply unchanged: Algeria

ALGIERS (Reuters) – OPEC will keep supply unchanged when it meets on Tuesday in Angola, Algeria's Energy Minister Chakib Khelil said on Sunday.

"There will be no change in OPEC supply of crude oil. OPEC will not reduce supply and it will not increase supply," Khelil told reporters.

A meeting of the producer group on Tuesday in Luanda is widely expected to keep existing supply curbs in place because although oil inventories are very high, the oil price is also robust.

Oil on international futures markets has traded close to the $75 per barrel top exporter Saudi Arabia and others have said is fair to both consumers and producers.

The Organization of the Petroleum Exporting Countries has officially held supply targets steady since it agreed a record supply cut in December last year of 4.2 million barrels per day (bpd) one hour payday loans.

OPEC delivered about 80 percent of those cuts earlier this year, but compliance has slipped to around 60 percent as the oil price has recovered from a steep slide last year.

Some have said Tuesday's OPEC meeting could make the case for tighter compliance, while others have said OPEC might need to act to reduce excess supply early in 2010.

In a report at the weekend, consultancy PFC Energy said OPEC might have to cut oil supply by one million bpd early in 2010 if weak demand led to a further rise in oil stockpiles, but it did not anticipate a supply reduction to be agreed in Luanda this week.(Reporting by Hamid Ould Ahmed; editing by John Stonestreet/Barbara Lewis)

OPEC to keep oil supply unchanged: Algeria

Panel Backs Bernanke for a Second Term at Fed

WASHINGTON — The Senate Banking Committee voted Thursday to approve the nomination of Ben S. Bernanke for a second four-year term as chairman of the Federal Reserve.

The 16-to-7 vote, which came after flashes of populist anger erupted amid a sluggish and uneven economic recovery, was not unexpected.

President Obama has said the nomination would provide crucial continuity as the country works through its gravest economic challenges in decades.

But it represented a retreat from Mr. Bernanke’s near-unanimous approval by the committee four years ago. Neither party’s members voted as a bloc, and even some of Mr. Bernanke’s supporters said they harbored reservations and might reconsider when the vote went to the Senate.

Even as Mr. Bernanke is widely credited for helping stabilize markets and averting economic calamity, outspoken critics, not all of them Republicans, have blamed him for enormously costly initiatives that have bolstered some Wall Street financial firms while leaving ordinary Americans staring at persistent double-digit jobless rates.

Mr. Bernanke, 56, has also been criticized for not doing more to prevent the financial crisis. He was originally named by President Bush in 2005 to succeed Alan Greenspan as the Fed chairman.

Senator Richard Shelby of Alabama, the committee’s ranking Republican, said that Mr. Bernanke, first as a member of the board of governors and then as chairman, was complicit in creating an atmosphere that encouraged risk-taking and contributed to the ultimately disastrous housing price bubble — signs of which, Mr. Shelby said, Mr. Bernanke had missed.

“Our trust and confidence were misplaced,” Mr. Shelby said, shortly before voting against the nominee.

An Oregon Democrat, Senator Jeff Merkley, also opposed the nomination, saying that even if Mr. Bernanke “has shown himself to be quite adroit with the fire hose” since the crisis erupted, he bore some responsibility for its outbreak, and thus for the loss of jobs and depleted savings accounts.

Some of the critics’ complaints had merit, said the committee chairman, Senator Christopher J. Dodd of Connecticut. Still, Mr. Dodd added, “Chairman Bernanke must also receive credit for the critical role he played in the events of last fall.” Had he and others not acted, Mr. Dodd said, the nation probably would have faced “utter economic catastrophe — and I believe nothing short of that was at risk.”

Instead, Mr. Dodd added, “I believe better days do lie ahead.”

A Republican, Senator Judd Gregg of New Hampshire, offered a strong endorsement of the nominee. While “mistakes were made” under his purview, Mr. Gregg said, Mr. Bernanke’s swift reaction to the financial crisis had proved crucial. “I tell you, it worked,” he said. “It’s that simple.”

But Senator Bernard Sanders, independent of Vermont, strongly opposes Mr. Bernanke’s nomination because of his role in the bailouts and has put a hold on the nomination payday loans no teletrack. That means it will require 60 votes, not a simple majority.

Although his confirmation appears likely, a number of no votes are expected from members of both parties when the full Senate votes and if Mr. Bernanke is not confirmed by Jan. 31, when his term ends, then the Fed’s vice chairman, Donald L. Kohn, would temporarily take over.

President Obama, in announcing his nomination of Mr. Bernanke in August, said he had led the Fed through “one of the worst financial crises that this nation and this world have ever faced” and, because of his background, his expertise on the Depression and his unflappable personality, was ideally suited to help lead the recovery.

During his four years, Mr. Bernanke has emerged as a favorite target of liberals and conservatives alike. Critics have tried to portray him as cozy with Wall Street elites and slow to react to signs that the financial system was on the brink of collapse.

Mr. Bernanke, a former professor at Princeton, was initially criticized as too academic, but he has since spearheaded some of the most interventionist actions by the Fed in its history.

At a hearing earlier this month, Mr. Bernanke acknowledged mistakes by the Fed in the runup to the financial crisis. But Mr. Bernanke adamantly defended the Fed’s response to the crisis, particularly its efforts to crack down on banks, subprime mortgages, credit card fees and executive compensation.

Mr. Bernanke has often been forced to navigate the line between doing too much and too little, and he has faced the constant danger of pushing the economy into a deeper downturn if the central bank’s extraordinary measures were withdrawn too quickly.

At the hearing earlier this month, Mr. Bernanke bristled at proposals to strip the Fed of its power, saying the central bank had unique expertise and knew the inner workings of major financial institutions better than any entity.

Adding to the intensity surrounding Mr. Bernanke’s appointment, Time Magazine named him this week as its Person of the Year, citing his role in leading the economic recovery. Mr. Bernanke’s grizzled visage appears on the magazine’s cover, superimposed on a dollar.

When the Senate Banking Committee took a voice vote on Mr. Bernanke’s first nomination as Fed chairman, only one senator opposed the nominee: Senator Jim Bunning, Republican of Kentucky.

On Thursday, Mr. Bunning, who has one of the most conservative voting records in the Senate, remained a thorn in the chairman’s side.

In delivering his criticism, he cited a blogger’s remark that giving Mr. Bernanke the Person of the Year citation was like rewarding the captain of the Titanic.

Brian Knowlton reported from Washington, and Javier C. Hernandez from New York.

Panel Backs Bernanke for a Second Term at Fed

BofAs Moynihan zones in on one word: Execute

CHARLOTTE, North Carolina (Reuters) – Brian Moynihan may be about to run the largest U.S. bank at a time of massive change in the crisis-damaged industry but he seems to be restricting his public comments about strategy to one word: Execute.

Moynihan, who was named CEO-designate of Bank of America Corp on Wednesday night, used the word roughly a half-dozen times in a speech to a packed audience of nearly 1,000 cheering bank employees in a downtown Charlotte theater on Thursday.

"It's just about execution," he said.

And he used the word at least three times in interviews with major news organizations on Wednesday night.

The on-message focus on the word by Moynihan suggests a departure from the style of current CEO Kenneth Lewis, who was best-known for his deal making.

Lewis engineered large takeovers for much of his nearly decade-long stay in the job. In 2004, the bank bought FleetBoston Financial for $47 billion, an acquisition that brought Moynihan to the company. Lewis also bought U.S. Trust, credit card issuer MBNA, Countrywide, and brokerage Merrill Lynch, a deal which Moynihan helped to negotiate.

Moynihan says that Lewis has built a company that has huge global presence.

"There isn't a market we can't transact in, and a place we can't get capital," Moynihan said to the audience.

Still, he signaled that repairing current businesses rather than buying new ones was on the top of his agenda.

"We don't have to think about buying something," Moynihan said.

Among the tasks ahead are the further integration of brokerage Merrill and mortgage lender Countrywide, both bought in the past two years.

Moynihan said he has no plans to sell the bank's U.S. Trust private wealth unit, which it bought in 2006 for $3.3 billion and which some analysts say now duplicates much of the same work done by Merrill personal loans for bad credit.

The various parts of the Bank of America's business -- which now sprawl from the mortgage business based in Calabasus, California to the credit card division in Wilmington, Delaware -- must learn to operate as one, unified company.

Moynihan, 50, must grapple with increasing credit problems for the bank, where credit card delinquencies are near the top of the industry and mortgage and consumer loans problems are growing.

That's a tall order for a lawyer turned investment banker who served as the head of Bank of America's head of retail banking for less than a year.

Moynihan also must navigate the company through its on-going legal probes into the heavily scrutinized Merrill Lynch purchase.

The bank has a looming case brought by the U.S. Securities and Exchange Commission, scheduled for early next year around its disclosures during the Merrill Lynch deal, and the U.S. Congress and New York Attorney General's office are also probing the deal.

Critics say his relative lack of long-term banking experience may not clear the bank's operational hurdles.

"It seems like the board is rewarding failure," said John Finger, of Houston-based Finger Interests Ltd.

The family investment firm, which owns Bank of America shares, has been campaigning against Moynihan's appointment and sought an outside candidate to succeed Lewis.

It is not clear how many outside candidates were interested in the spot. Kenneth Lewis, the bank's departing CEO, said at an employee meeting on Thursday that Moynihan had a rare quality.

"He wanted the job," Lewis said, drawing chuckles from the crowd.

(Reporting by Joe Rauch; Editing by Martin Howell and Bernard Orr)

BofA's Moynihan zones in on one word: Execute

Hot News: House aims to pass debt increase, jobs bill

Cobalt International shares fall in market debut

DENVER – Shares of oil exploration company Cobalt International Energy Inc. slipped following their New York Stock Exchange debut on Wednesday.

In an initial public offering, the Houston company offered 63 million shares at $13.50 apiece, which was below the expected range of $15 to $17.

By midday, Cobalt shares had fallen 10 cents to $13.40. They earlier traded as low as $12.50. They trade on the NYSE under the ticker symbol "CIE."

Proceeds of the offering were $850.5 million. They could reach $978.1 million if the offering's underwriters exercise an option to buy 9.45 million more shares.

Cobalt plans to use the proceeds for drilling and exploration through 2011, capital spending and for general corporate purposes.

Analysts who research IPOs characterized Cobalt as a risky investment because it had no proven reserves and does not expect to generate revenue for at least two years.

Cobalt has posted losses throughout its history and no one knows where volatile oil prices will be in three years.

Francis Gaskins, president of IPOdesktop, said Wednesday he was not surprised with the stock's performance on its first day of trading. "It's a public drilling fund with no tax advantages," he said business card. "They'd better find oil soon and fast."

Cobalt is reaching out to the public markets as the oil industry is recovering from the recession. Oil prices have hovered in the $70 range since early October, up from a low of $32.70 per barrel set in January. But supplies have remained high and demand has diminished.

The company was founded in 2005 by a group of private equity investors and longtime oil industry executives, including Chairman and CEO Joseph H. Bryant, whose resume includes stints at Unocal Corp., BP and Amoco.

The company uses a proprietary method for exploration that involves analyzing geophysical information. It has purchased leases in the Gulf of Mexico, and off the coast of Angola and Gabon, regions where many major oil companies operate.

Cobalt already has invested about $1 billion and expects to spend $1.4 billion over the next two years on exploration, according to research analyst Nick Einhorn of Renaissance Capital based in Greenwich, Conn.

Cobalt International shares fall in market debut

Wells puts $25 price tag on TARP-payback shares

SAN FRANCISCO (MarketWatch) -- Wells Fargo & Co. said Tuesday that it priced a $10.65 billion offering of 426 million common shares at $25 per share and will use the proceeds to help fund repayment of the $25 billion it received in TARP investment from the U.S. government.

The underwriters will have a 30-day option to purchase up to an additional 63.9 million shares of common stock from the company to cover overallotments. The closing is expected on or about Dec. 18.

Wells announced late Monday that it would raise the money to help fund a repayment of the $25 billion the firm received as a Troubled Asset Relief Program investment from the U.S. government. Wells became the last of the original group of U.S. banking giants to agree to pay back TARP.

Wells shares rose 1.6% in early trades, to $25.89, after the bank became the last major lender to announce a return of the government funds. Rival Citigroup Inc. had said earlier Monday that it would repay its TARP loan.

PM Report: A Frosty Reception for Bankers

The White House hosted a meeting with the leaders of 12 U.S. banks to discuss ways to boost lending and the economy. WSJ's Elizabeth Williamson and Dow Jones's Al Lewis and Michael Reid discuss the significance and what to expect out of the meetings, in the News Hub.

Wells Chief Executive John Stumpf on Tuesday declined to provide details of his firm's talks with the government regarding the decision to repay TARP funds portable infrared heaters. Stumpf, when asked on a conference call to describe the talks with the government about payback terms, said: "I don't think it is productive, and I am really not in a position to discuss the discussions and negotiations with the other party. I just don't think it would be productive.

"All I know is, in our case, we thought it was in our shareholders' interest to do this thing now," Stumpf said on the conference call.

In September, Wells Fargo had announced plans to repay TARP without selling new stock and thereby diluting the stakes of its existing shareholders. See related story about Wells Fargo's plans to repay TARP.

Repaying TARP will eliminate $1.25 billion in annual preferred-stock dividends, and will be slightly accretive to per-share earnings in 2010, Wells Fargo said.

The deal to repay TARP could remove Uncle Sam as a stakeholder and eliminate the capacity of the government to directly influence the firm's executive compensation. It could also help the bank lure investors and customers who may have looked to rivals not tethered to government aid.

Wells puts $25 price tag on TARP-payback shares

Europe Markets: European shares jump after Dubai gets debt aid

LONDON (MarketWatch) -- European shares jumped on Monday, with banks in the lead, after Abu Dhabi provided $10 billion of finance to debt-laden Dubai to stave off a potential default of a bond due to mature today.

The pan-European Dow Jones Stoxx 600 index rose 0.9% to 247.38, the third day of gains for the index.

In the banking sector, shares of Standard Chartered were up 4.9% and Royal Bank of Scotland shares were up 4.1%. British banks are thought to be some of the most exposed to Dubai's debt woes.

Dubai's conglomerate Dubai World roiled global markets in late November when it said that it wanted to suspend debt payments for six months.

However, on Monday it said that it has received $10 billion in financing from fellow emirate Abu Dhabi, which it will use to pay part of the debt held by Dubai World and its property unit Nakheel.

The statement also said that the United Arab Emirates Central Bank, which governs monetary policy in Dubai, Abu Dhabi and other UAE constituents, "is also prepared to provide support to local UAE banks." Read more on Dubai finance.

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On a regional level, the U.K. FTSE 100 index climbed 1.1% to 5,318 auto loans for bad credit.88, the German DAX index rose 0.9% to 5,810.83 and the French CAC-40 index advanced 0.9% to 3,836.87.

Asian shares were mostly higher, while U.S. stock futures were pointing to a higher open on Wall Street.

Deal-making has also been more of a theme for equity investors of late, and chocolate maker Cadbury , up 0.4% to 794 pence, reiterated its rejection of Kraft Foods's offer to buy the firm on Monday.

It made that statement while detailing that its performance to the end of November has been in line expectations and that full-year constant currency revenue growth is expected to be in the middle of its 4% to 6% goal range.

Cadbury is targeting 5% to 7% revenue growth over the next four years, on margins between 16% and 18% in 2013.

Axa shares were up 1.7% in Paris after AXA Asia Pacific Holdings said that it will "carefully consider" a revised $11.7 billion bid from AMP and AXA.

Bwin shares jumped 5.6% in Austria. The Financial Times reported that the firm is in informal talks with PartyGaming , up 3.3%, over a merger but also that a deal wasn't imminent.

Hotel and restaurant operator Whitbread , up 3%, also updated investors on trading, saying that its expecting fiscal 2010 results to exceed analyst estimates after it cut costs.

Positive sales momentum has also helped, the firm said, with third-quarter comparable sales up 0.3%.

Europe Markets: European shares jump after Dubai gets debt aid

EADS says not fooling about tanker boycott threat

WASHINGTON (Reuters) – Airbus parent EADS (EAD.PA) is sticking to plans to boycott a potential $50 billion competition to build a U.S. Air Force refueling fleet absent major changes in the way the winner would be picked.

"This is not a negotiating ploy," Sean O'Keefe, chief executive of EADS' North America unit, told reporters at a briefing on Friday.

EADS has joined Northrop Grumman Corp (NOC.N) to compete against Boeing Co (BA.N) for a rematch to build an initial 179 aircraft that refuel others in flight.

Northrop, which would be the team's prime contractor, said on December 1 it had concluded that a draft request for proposals (RFP) issued by the Air Force favored a smaller tanker of a type Boeing could offer based on its 767 wide-body model.

Northrop Chief Executive Ron Sugar denied the company was trying to dictate requirements for the Air Force, as some Boeing supporters have suggested, but said there should be no mistaking the team's resolve.

"Nobody should make a mistake. We cannot bid based on this current RFP," Sugar told Reuters in a telephone interview.

He said there was "constructive engagement" on the part of the Air Force with Northrop, and its concerns, but he declined to predict if the Air Force would make sufficient changes that would allow the companies to compete after all.

Guy Hicks, an EADS North America spokesman, said: "The value of added capability offered above the minimum requirement -- including greater range, fuel offload and transport capacity -- must be included and fairly weighted in the final request for proposal."

The Northrop-EADS is offering an Airbus A330-200 wide-body derivative.

The contract could be worth $25 billion to $50 billion over time, a senior U.S. military officer said in relaunching the competition September 24.

The contract is due to be awarded by the end of June.

EADS "HEARTENED"

The potential bidders met separately on Tuesday at Wright Patterson Air Force Base in Dayton, Ohio, with government officials weighing possible changes to draft bidding rules released in late September fast cash advance loan.

"We're heartened" by the discussions under way, O'Keefe said. "We couldn't ask for a more thoughtful and forward-leaning response."

He said he understood the government was now aiming to release a final request for proposal in the middle of next month.

A Boeing spokesman, William Barksdale, said the Boeing team met Air Force officials for several hours "to voice both observations and concerns" about how tanker proposals would be judged.

"We were also told our input would be shared with senior Air Force leadership as they move forward to releasing the final RFP in January 2010," Barksdale said in a blog posting.

The government is weighing comments received during the review process, said Cheryl Irwin, a Defense Department spokeswoman.

"When those deliberations are complete regarding both the comments received and what RFP changes will be made, it will issue the final RFP," she said in an emailed statement.

The Northrop-EADs team won a contract to build 179 tankers for the Air Force in February 2008, only to have it scrapped after U.S. auditors upheld a Boeing protest tied to Air Force missteps in evaluating the bids.

Air Force General Duncan McNabb, head of the U.S. Transportation Command, told reporters on Wednesday that he was satisfied with the draft RFP.

"From the requirements standpoint, I feel very good about it," he said. "My take is that everything we need in the new tanker is reflected" in the draft issued in September.

The new aircraft would replace KC-135 tankers with an average age of about 50 years.

The plan calls for delivery of the new tankers to start in 2015, with the first ones to be operational in 2017.

Two successive competitions would take place in decades to come to complete a fleet renewal expected to cost more than $100 billion for up to 600 new tankers. (Editing by Steve Orlofsky and Ted Kerr)

EADS says not fooling about tanker boycott threat

Mutual Funds Weekly: These funds deserve no hugs

Don't miss these top money and investing columns:

These funds deserve no hugs

Questions for your money adviser

Stock-fund giant plans ETFs

Holiday wish list for fund investors

Some mutual-fund companies seem to take the attitude that if you can't beat 'em, join 'em. They'll peddle an actively managed portfolio that bears an uncanny resemblance to the broad-market index it aims to top.

The trouble is that these funds charge a lot more than an indexed offering but don't add more value -- at least not for shareholders. The fund company makes more money, as does the broker who sold the product, but all the customer gets is an average investment at an above-average cost.

The solution is really quite simple: If you want active management, then get what you pay for. Otherwise, save yourself some money and buy index funds or exchange-traded funds. There's absolutely no reason to drink soda water at champagne prices.

-- Jonathan Burton, assistant personal finance editor

INVESTING Some mutual funds charge for active management, yet follow the market

The pact between a mutual-fund investor and the manager of the typical stock mutual fund is, in theory, a simple one: payment in exchange for expert stock selection. But financial advisers have long complained there are funds that don't fully live up to that exchange. See Mutual Understanding.

Five questions for your financial adviser, and answers to expect

Bernard Madoff was unmasked a year ago this week, and the money manager's massive fraud is still causing fissures in the often-fragile, trust-based relationship between financial advisers and their clients. See Life Savings.

Heed the market, not the marketing

Don Phillips, managing director at investment researcher Morningstar Inc., offers lessons for investors from a dismal decade. Watch video interview.

Mining and medical stocks spur the go-anywhere Encompass Fund

If you pick stocks for a living, a company's price-to-earnings ratio usually plays a part in your decision to buy or not to buy. But that metric is not always top of mind for Marshall Berol, co-manager with Malcolm Gissen of the Encompass Fund. See The Stockpickers no teletrack payday loans.

ETF TRENDS T. Rowe Price plans active ETFs

Asset manager T. Rowe Price Group Inc. is preparing to launch a range of actively-managed exchange-traded funds, the first time a leading stock-fund manager has decided to jump into the active ETF space. See FundWatch.

Dubai puts dent in emerging-market ETF euphoria

Investors have piled into exchange-traded funds that track hot-performing emerging markets this year, but the tremors from Dubai's debt scare provide a clear warning of this volatile sector's risks. See ETF Investing.

INDUSTRY NEWS Upheaval continues at TCW

Asset management giant TCW Group is facing trouble on several fronts after firing its chief investment officer Jeffrey Gundlach last week. Read about turmoil at TCW.

TCW to buy Met West, CIO Gundlach ousted

In a deal that shakes up the clubby world of bond investing, the TCW Group, a $110 billion fixed-income giant, said it would buy rival bond manager Metropolitan West Asset Management and had fired its well-known chief investment officer. See full story.

COMMENTARY Fund investors should make these wishes

Dear Mutual Fund-Company Top Dogs: The last two years has felt like the worst of times and the best of times for your shareholders, with many of your issues taking them from famine to a feast that hasn't quite filled the void and leaves them hungry and hopeful for more. See Chuck Jaffe.

Morningstar's 'best funds for 2010' bring out the worst

If you were handed an authoritative list of the "best" mutual funds for the next year, it would be hard to believe that any would turn out poorly if you picked them. And yet, if you chose the funds that Morningstar Mutual Funds has tapped as the best for the year ahead, you'd be making the Stupid Investment of the Week. See which funds make the list.

Stock funds suffer more withdrawals

November turned out to be yet another in an incredible series of months in which, in the face of a rising stock market, mutual-fund investors on balance pulled money out of their stock mutual funds.

Mutual Funds Weekly: These funds deserve no hugs

London Markets: Banks under pressure in mildly lower London

LONDON (MarketWatch) -- London shares weakened on Friday, with banks under pressure after the National Audit Office said that two lenders won't meet business lending targets even after receiving enormous amount of taxpayer support.

Royal Bank of Scotland down 2.9%, and Lloyds Banking Group , down 2.4%, which are part-owned by the U.K. government, are on track to meet their retail mortgage lending commitments but lending to businesses is likely to fall short of the targets, the National Audit Office said.

Public support to U.K. banks has reached 850 billion pounds ($1.4 trillion), the NAO said, which it termed "unprecedented." It added that the scale of the loss to the taxpayer will not be known for years to come. See NAO story.

"The National Audit Office has concluded that the public support provided to U.K. banks by the Treasury was justified given the scale of the economic and social costs if one or more major banks had collapsed," it said.

Overall, the U.K. FTSE 100 index declined 0.4%, or 20.10 points, to 5,292.89. Other European shares were also lower. See Europe Markets.

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U.S. stock futures were in a tight range ahead of data that's expected to show the U.S. economy lost more jobs in November. Read more on jobs data.

Engineering group Amec , declined 1.9% in the top index.

It's still expecting to record earnings before interest, tax and amortization margin "approaching" 8% in 2009 and is on track for a margin of 8.5% in 2010 in a challenging external environment.

Amec's aiming to double its earnings per share to more than 100 pence in 2015 and also intends to increase levels of investment, saying it sees acquisitions seen as the most attractive use of cash fast payday loans.

On the plus side, shares of British Airways rose 1.9% after it was upgraded to buy from hold at Citigroup. The broker said that the strategic and financial outlook for British Airways is looking better, while the improving outlook for premium traffic may boost earnings recovery.

Outside the top index, shares of low cost airline easyJet advanced 0.7% after it posted a 12.2% rise in passengers carried in November, to 3.4 million.

Turning to housebuilders and shares of Bellway rose 1.1%..

Reservations in the four months to Nov. 30 rose 51% compared to the same period a year ago while cancellation rates have reverted to a more normal level and average selling prices are around 16% ahead of last year, the firm said.

It expects sales volumes for the first six months ending Jan. 31. to be around 10% ahead of the same period last year and to maintain an operating margin of 6% to 7% will be maintained.

Rival Berkeley Group declined 1.5% after it said that its first-half net profit fell to 37 million pounds, from 57 million pounds last year, hurt by lower transaction volumes and lower prices.

Revenue declined to 290.1 million pounds, from 452.6 million pounds and operating margin for the period totaled 17.4%, down from 17.8% last year.

"The last six months has seen an improvement in the market conditions, albeit from a very low base," the firm said.

Candover Investments shares were down 2.1%. It's negotiated an extension of the standstill agreement related to the suspension of its 2008 fund to Jan 8.

London Markets: Banks under pressure in mildly lower London

Obama calls for new ideas for job creation in U.S.

WASHINGTON, Dec. 3 (Xinhua) -- U.S. President Barack Obama Thursday called on business leaders at a jobs forum he hosted at the White House to generate more jobs to tackle the rising unemployment. Related U.S. job cuts slow down U.S. Fed survey sees improvement in economic recovery U.S. stocks mixed upon job data, Fed report Wall Street retreats ahead of Friday's job data Wall Street retreats on mixed economic data"I heard a great deal of challenges this afternoon about -- or a great deal this afternoon about the challenges that we're all facing, for businesses large and small, when it comes to trying to create jobs," said the president at the close of the forum.

He said his administration has got "some good, hard-headed feedback from people," referring to 130 executives, economists, small business owners and non-profit officials who attended the forum.

"While I believe that government has a critical role in creating the conditions for economic growth, ultimately true economic recovery is only going to come from the private sector," said Obama.

"We don't have enough public dollars to fill the hole of private dollars that was created as a consequences of the crisis," he added.

U.S. unemployment rate rose to 10.2 percent in October, the highest in more than 26 years. Since the recession began in December 2007, the U.S. economy has lost a net total of 7.3 million jobs.

Moreover, the budget deficit for the 2009 fiscal year, which ended on Sept. 30, set an all-time record in dollar terms of 1.42 trillion dollars, tripled last year's record.

Obama, who is under growing political pressure to tackle both the soaring deficit and unemployment, said he is "open to every demonstrably good idea."

"There's no question that it's difficult out there right now," said the president easy payday loan. "Digging ourselves out of the hole we have dug into is not going to be easy."

Ideas for spurring job creation abound at the forum. They range from giving business tax credits for hiring workers to pumping millions into state and local economies. One of the top priorities is extending unemployment benefits.

Tax incentives for job creation are "worthy of further consideration," said Obama, adding that his administration is also set on making a big push in the areas of green jobs.

"We can create new jobs, spur enormous amounts of business opportunities for the clean tech sector, but we're also laying the groundwork for energy independence," said the president.

He said he would announce some new ideas of his own next week.

"We cannot hang back and hope for the best," said Obama. "I am not interested in taking a wait and see approach, when it comes to creating jobs, I want to take any reasonable step to accelerate job creation."

Obama's ideas are likely to include a home-retrofitting proposal modeled on the popular "cash for clunkers" program that has particularly captured Obama's imagination, U.S. media quoted Obama's aides as saying.

Critics see the high-profile forum as nothing more than a public-relations move.

House Republican leaders hosted their own jobs forum on Thursday. "The American People are asking, 'where are the jobs?' but all they getting from Washington Democrats is more spending, more debt, and more policies that hurt small businesses," said Representative John A. Boehner. Special Report: Global Financial Crisis

Obama calls for new ideas for job creation in U.S.

Shares Are Mixed as Fed Gives Report on Economy

The stock market struggled but held its ground Wednesday as an upbeat assessment of the economy from the Federal Reserve offset drops in bank and energy stocks.

Most stocks finished higher after the Fed said regional economic activity had generally improved since its last snapshot in October. The central bank also said consumer spending has strengthened even though employment and commercial real estate has remained weak.

The Dow Jones industrial average slipped 19 points a day after gaining 126. Reports of analysts’ warnings about bank stocks hurt financial shares, while a steep drop in oil weighed on energy companies.

A mixed reading on the labor market also kept trading subdued. The ADP National Employment Report said private companies cut 169,000 jobs in November, fewer than the number lost in October but worse than the 160,000 cuts expected by economists polled by Thomson Reuters. It was the eighth consecutive monthly decline.

Investors are focused on the job market, which remains weak despite signs of life in manufacturing, housing and other parts of the economy.

“It all falls apart if you don’t get jobs to come around,” said E. William Stone, chief investment strategist at PNC Wealth Management.

The ADP report, while representing only a portion of the economy, is often seen as a good indicator of what will emerge in the government’s closely watched monthly employment report, which is due on Friday. Economists think the unemployment rate remained flat at 10.2 percent in November.

A rising dollar also cooled the market’s advance.

Trading has been volatile in recent days as investors try to determine whether the large gains in the stock market since early March accurately reflect the economy’s strength. Investors have been worried that the nascent recovery could be threatened by economic problems overseas or missteps by the government and the resulting gyrations in the dollar. Concerns over a potential debt crisis in Dubai caused a temporary halt in buying last week.

The Dow fell 18.90 points, or 0.2 percent, to 10,452.68. The Standard & Poor’s 500-stock index edged up 0.38 points, or less than 0.1 percent, to 1,109.24, and the Nasdaq composite index rose 9.22 points, or 0 free credit report instantly.4 percent, to 2,185.03.

On Tuesday, stocks surged, driven by a weaker dollar and higher commodities prices. A months-long slide in the dollar, a result of very low interest rates, has encouraged investors to buy riskier assets that have the potential to earn better returns.

Analysts say trading is likely to remain choppy through the rest of the year because of opposing forces in the market. Some investors are exiting stocks, looking to lock in the gains they have amassed since the rally began in March, while others who may have missed out are looking to get in.

On Wednesday, trading in foreign exchange, commodities and debt markets was mixed as traders remained cautious.

“People don’t know where to go,” Mr. Stone said. “That wait-and-see attitude has kicked in.”

The ICE Futures U.S. dollar index, which measures the dollar against other major currencies, edged up 0.3 percent.

The Treasury’s benchmark 10-year note fell 7/32, to 100 17/32 and the yield rose to 3.31 percent from 3.28 percent late Tuesday.

Gold prices settled at $1,215.70 an ounce, while oil prices fell $1.77 to settle at $76.60 a barrel on the New York Mercantile Exchange.

Among financial stocks, Bank of America fell 24 cents, or 1.5 percent, to $15.65, while Wells Fargo slid 54 cents, or 1.9 percent, to $27.45 after reports that some analysts had voiced concerns about industry profits next year.

Chesapeake Energy fell 70 cents, or 2.9 percent, to $23.40 as oil fell. Occidental Petroleum slid 97 cents, or 1.2 percent, to $81.21.

Airlines rose after Continental Airlines reported November results that were better than expected and as an official of Delta Air Lines said the carrier would be cautious as it expands. Delta acquired Northwest Airlines last year. Continental rose 71 cents, or 4.8 percent, to $15.67, while Delta rose 67 cents, or 7.8 percent, to $9.29.

Overseas, Britain’s FTSE 100 gained 0.3 percent, Germany’s DAX index rose 0.1 percent, and France’s CAC-40 added 0.5 percent. Japan’s Nikkei stock average rose 0.4 percent.

Shares Are Mixed as Fed Gives Report on Economy

Market jumps on commodity boost, recovery hope

NEW YORK (Reuters) – U.S. stocks rose on Tuesday, boosted by a run-up in the shares of natural resource companies, as economic data reinforced recovery hopes and U.S. dollar weakness lifted global commodity prices.

The market was also boosted as fears receded about the impact of Dubai's debt woes and after a pair of business surveys showed the Chinese economy was ending the year on a strong note.

The S&P materials index (.GSPM) climbed 1.4 percent, helped by shares of commodity-oriented companies like U.S. Steel Corp (X.N), up 2.2 percent, Alcoa Inc (AA.N), up 1.3 percent, and Newmont Mining Corp (NEM.N), up 3.4 percent.

U.S. economic data showed pending sales of previously owned U.S. homes rose more than expected to their highest level in 3-1/2 years in October. The Dow Jones home construction index (.DJUSHB) gained 1.3 percent.

"I'm kind of shocked on the pending home sales side. That was definitely much better than expected, especially since we didn't have much direction in October," said Dan Cook, senior market analyst at IG Markets in Chicago.

"This is some of the best news I've seen in a while low fee pay day loans... and should help drive the markets up today."

The Dow Jones industrial average (.DJI) rose 87.51 points, or 0.85 percent, to 10,432.35. The Standard & Poor's 500 Index (.SPX) gained 9.18 points, or 0.84 percent, to 1,104.81. The Nasdaq Composite Index (.IXIC) climbed 21.12 points, or 0.98 percent, to 2,165.72.

A report by the Institute for Supply Management showed the U.S. manufacturing sector expanded in November for the fourth straight month but at a slower rate than expected.

The U.S. dollar index (.DXY) was off 0.6 percent, while U.S. front-month crude shot up 1.6 percent to $78.53.

The dollar fell against a basket of six other currencies as waning worries about Dubai's debt, Australia's interest rate hike, and upbeat euro zone data dimmed the greenback's safe-haven appeal.

The benchmark S&P 500 is up 63.3 percent from its 12-year closing low on March 9.

(Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)

Market jumps on commodity boost, recovery hope