MARKET SNAPSHOT: U.S. Stocks Cheered By Bullish Economic Data

U.S. stocks on Wednesday leaped ahead for the first time this month after early data cast a more positive light on the U.S. economy before Friday's payrolls report, while leaving intact hopes of another interest-rate cut next week.

"The data were in sharp contradiction to expectations of an impending recession," said analysts at Action Economics.

The Dow Jones Industrial Average (DJI) gained 170 points to 13,418.8, with 28 of its 30 components ahead, led by insurer American International Group Inc. ( AIG), up 5.5%.

Another blue chip on the rise was Intel Corp. (INTC), recently up 3.4%, after the chip giant's stock drew an upgrade on expectations of a robust personal computer market in 2008. .

The broader indexes surged higher as well, with the S&P 500 (SPX) ahead 19.45 points to 1,482.24, while the technology-heavy Nasdaq Composite (RIXF) advanced 45.65 to 2,665.48,

Volume on the New York Stock Exchange topped 430 million shares, with advancing stocks ahead of those declining more than 3 to 1, while Volume on the Nasdaq came to 746 million, and advancing stocks topped decliners more than 2 to 1.

Ahead of the opening bell, major stock index futures had extended early gains after ADP reported hiring in the private sector expanded at a faster pace in November, gaining 189,000 after a revised 119,000 jump in October. The latest monthly hike is well above forecasts calling for a rise of 60,000.

In a separate report, the Labor Department said productivity in the nonfarm business sector rose at a 6.3% annual rate in the third quarter, an upward revision from the 4.9% tally a month ago.

And, in a signal of milder inflationary pressure than previously thought, the government revised unit labor costs down, showing a 2% annual decline compared to a 0.2% drop estimated a month ago. .

In a later report, the Commerce Department said orders for U.S.-made factory goods climbed 0.5% in October, its biggest increase in three months. .

The Institute for Supply Management said its nonmanufacturing index declined to 54.1% in November from 55.8% in October, with the drop larger than expected.

On the New York Mercantile Exchange, crude-oil futures rose to above $90 a barrel after the government reported U.S. crude inventories fell by 8 million barrels last week, exceeding the decline of 1.7 million barrels anticipated by analysts. Crude for January delivery was recently up 50 cents to $88.82. .

Banking central

On Wednesday, the Reserve Bank of Australia didn't cut interest rates, as the Bank of Canada did Tuesday, but it did sound a more dovish tone. "Sentiment in global credit markets has deteriorated recently after an earlier improvement and prospects for growth in the major economies appear to be weakening," the Aussie central bank said.

The Bank of England and the European Central Bank will make rate decisions on Thursday, with the U.K. central bank under increasing pressure to cut rates after data released showed measures of house prices, consumer confidence and services sector falling.

The British pound dropped sharply against most rivals, while the U.S. dollar was stronger against the euro and the Japanese yen as well.

On Tuesday, U.S. stocks posted a second straight session of losses as a spate of downgrades for financials fueled concerns about the credit-market crisis and updates from Nokia Corp. and Merck & Co. Inc. disappointed investors.