U.S. stocks climb despite downbeat news

11:05, July 07, 2011      

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U.S. stocks managed to end higher on Wednesday, overcoming negative impact of European debt concerns and worse-than-expected service sector data.

The Dow Jones industrial average rose 56.15 points, or 0.45 percent, to 12,626.02. The Standard & Poor' s 500 was up 1.34 points, or 0.10 percent, to 1,339.22.

The Nasdaq Composite Index gained 8.25 points, or 0.29 percent, to 2,834.02, the seventh straight gain for the tech-heavy average.

Major indexes were under pressure at the open after Moody's Investors Service cut Portugal's long-term government bond ratings by four notches to junk territory on Tuesday, raising concerns that the European debt problems may spread from one country to another, given Greece was still struggling to solve its debt problems.

Meanwhile, the Institute for Supply Management's non- manufacturing purchasing manager's index declined to 53.3 in June, from 54.6 in May and below market prediction of 54.0. The worse- than-expected service data suggested that U.S. service sectors were still weak.

Also adding to the pressure, China raised its key interest rate on Wednesday for a third time this year in an effort to fight surging inflation.

Market sentiment was still cautious after major indexes finished their best week in nearly two years as investors came back from a long-weekend holiday and looked forward to a new earnings season.

The market rose in all five sessions last week as concerns over Greek debt allayed and some of the economic data came in better than expected. All three major averages gained about 5.5 percent, the best performance in nearly two years.

Moreover, investors were awaiting the government's monthly non- farm payroll report, which is scheduled to be released on Friday and always set the tone for the market in the following one or two weeks.

In other markets, the U.S. dollar rose against the euro, as Portugal's downgrade increased investors' appetite for the safe- haven greenback. Oil prices, which always trade opposite to the dollar, dipped 0.25 percent to settle at 96.65 dollars a barrel in New York trading.

Gold futures closed at 1529.20 dollars an ounce, their highest level in two weeks, with global-debt troubles helping it tally a two-session win of nearly 47 dollars an ounce.

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