(Updates to close)
By Ellis Mnyandu
NEW YORK, March 5 (Reuters) - U.S. stocks rose on Wednesday as
evidence the services sector may not be as weak as feared allayed
investors' concerns about a recession and soaring commodity prices
lifted energy and mining companies' shares.
Data on the U.S. services sector, which makes up roughly 80
percent of the economy, shrank less than expected, overshadowing a
surprising decline in private-sector employment for February.
A startling drop in U.S. oil supplies lifted crude futures to a
record in New York, boosting shares of oil companies, including
Chevron Corp <CVX.N>, whose stock jumped 2.4 percent.
Surging metal prices lifted shares of mining companies, including
Freeport McMoRan Copper & Gold Inc <FCX.N>, whose stock finished up
5.2 percent.
Data from the Institute for Supply Management showing less
deterioration in the vast services sector in February underpinned the
market.
"It certainly is nice to see a bit of a bounce for a change,"
said Peter Jankovskis, director of research at OakBrook Investments
LLC, in Lisle, Illinois,
The report on the vast services sector from the Institute for
Supply Management "would suggest that there is some strength out
there and, hopefully, the economy is beginning to re-accelerate," he
said.
The Dow Jones industrial average <> ended up 41.19 points, or
0.34 percent, at 12,254.99. The Standard & Poor's 500 Index <.SPX>
finished up 6.95 points, or 0.52 percent, at 1,333.70. The Nasdaq
Composite Index <> closed up 12.53 points, or 0.55 percent, at
2,272.81.
Chevron shares ended at $88.79 on the New York Stock Exchange,
and contributed the most to the gains of both the Dow and the S&P
500.
Shares of mining company Freeport McMoRan closed at $104.08,
while those of oil services company Schlumberger Ltd <SLB.N> advanced
3.9 percent to $87.85.
U.S. crude gained after Tuesday's sharp drop and OPEC oil
ministers left output unchanged, as expected. A report showed a large
and unexpected drop in U.S. supplies of crude. Crude oil futures for
April delivery settled at a record $104.52 per barrel, up $5, or 5
percent, on the New York Mercantile Exchange.
On the Nasdaq, shares of software maker Microsoft Corp <MSFT.O>
led the session's advancers to finish up 1.9 percent at $28.1199.
Jefferies & Co, a brokerage, started coverage of Microsoft with a
"buy" rating, saying the company's bid to take over Internet media
company Yahoo Inc <YHOO.O> was likely to go through. Yahoo shares
climbed 2.2 percent to $28.67.
But trading was volatile and at one point, the market briefly
succumbed to pressure from a sell-off in financial stocks that came
from disappointment in a plan to shore up the No. 2 bond insurer's
balance sheet.
Ambac Financial Group Inc <ABK.N>, facing billions of dollars of
expected losses from guaranteeing repackaged subprime mortgages, said
it will sell at least $1.5 billion of stock and equity-linked
securities to help boost capital.
Analysts said the cash won't be enough to stabilize the company's
credit-worthiness in the long run.
"If things continue to deteriorate, the circumstances could be
different in three to six months and they may have to raise more
money," said Peter Boockvar, equity strategist at Miller Tabak & Co
in New York.
Ambac shares sank 18.8 percent to $8.70 on the NYSE.
Among banks, shares of Bank of America Corp <BAC.N>, the No 2
U.S. bank by assets, declined 1.6 percent to $37.55.
(Reporting by Ellis Mnyandu; Editing by Jan Paschal)
