* Rise in defensive stocks offsets economic gloom
* Employment, services data suggest recession worsening
* Dow up 0.6 pct, S&P 500 up 0.8 pct, Nasdaq up 1.6 pct
* For up-to-the-minute market news, please click on
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(Updates to late morning)
By Ellis Mnyandu
NEW YORK, Dec 3 (Reuters) - U.S. stocks rose on Wednesday
as news pointing to a deepening recession spurred investors to
buy defensive stocks, including the shares of biotechnology
companies.
Shares of soft-drink maker Coca-Cola <KO.N> rose more than
3 percent, making the stock a top boost to the Dow.
Shares of Gilead Sciences <GILD.O> , up 3.3 percent, led
the Nasdaq's advancers as investors bet that the incoming
administration of President-elect Barack Obama might be more
favorable to their prospects.
Another standout was hamburger chain McDonald's Corp
<MCD.N>, whose shares rose more than 2 percent.
The rise in defensive stocks helped offset concerns sparked
by gloomy corporate outlooks from companies, including mining
company Freeport-McMoRan Copper & Gold Inc <FCX.N> , which
suspended its dividend, cut its 2009 capital expenditure budget
and slashed its copper output.
Additionally, ADP Employer Services said before the bell
U.S. private employers slashed the biggest number of jobs in
seven years in November, two days before the release of the
government's unemployment figures.
"The ADP report is part of the reason the market opened
down and why people are moving toward defensive positions,"
said Peter Jankovskis, director of research at OakBrook
Investments LLC in Lisle, Illinois. "There are people bracing
for the November payrolls report on Friday. We are in a very
nervous market."
The Dow Jones industrial average <> rose 101.79 points,
or 1.21 percent, to 8,520.88. The Standard & Poor's 500 Index
<.SPX> climbed 11.54 points, or 1.36 percent, to 860.35. The
Nasdaq Composite Index <> shot up 29.72 points, or 2.05
percent, to 1,479.52.
The market had rebounded on Tuesday, helped by reassuring
comments from General Electric <GE.N>, but with the United
States officially mired in a year-old recession, stocks have
had only isolated rallies that have sputtered out, and the
benchmark Standard & Poor's 500 index is down 42 percent for
the year.
The ADP data offered more evidence of the extent of the
recession, which began a year ago and has been marked by the
housing downturn and rising unemployment. A bleak jobs picture
creates a major headwind as the market attempts to recover from
lows going back nearly 11 years.
ADP also bumped up the number of jobs cut in October.
Sentiment was also jolted by a report that showed the vast
services sector contracted further in November, sending the
non-manufacturing sector gauge of the Institute for Supply
Management to a record low. []
Besides a boost from biotech shares, the Nasdaq also got a
lift from shares of big-cap technology companies after Cisco
Systems Inc <CSCO.O> said it did not plan layoffs at this
point.
That reassuring view sent Cisco shares up 3 percent to
$15.78 and helped shares of Research In Motion <RIM.TO>
<RIMM.O> reverse an earlier slide triggered by its profit
warning. RIM shares were up 1.2 percent at $37.78 after falling
as low as $35.09 earlier.
But slackening demand sent Freeport 18 percent lower to
$77.77. Aluminum producer Alcoa <AA.N>, fell 5 percent to
$9.25
(Editing by Kenneth Barry)
