Stocks rise despite reports

Stock prices rose sharply Wednesday, staging their seventh advance in eight sessions, despite another stream of downbeat economic readings.

The major indexes saw big swings throughout the day, but all closed up more than 2%. The Dow Jones industrials gained 172 points.

Data issued Wednesday showed slower productivity growth and a pullback in the service sector. And the Federal Reserve reported worsening economic conditions across the country. Each piece of news sent stocks lower but only briefly.

Analysts said stock prices already reflected a great deal of bad news.

“The market is beginning to look forward, and a lot of the selling pressure appears to be abating,” said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners.

The Fed’s report, known as the beige book, suggests the economy is sinking deeper into recession, with Americans hunkered down heading into the holidays.

Earlier, the Institute for Supply Management said its index of service sector activity fell sharply in November as weak spending hurt insurers, retailers and hotels. And the Labor Department reported that productivity growth slowed in the third quarter.

The market also fluctuated sharply Tuesday before closing higher. Even with a 680-point plunge Monday, the Dow is up more than 1,000 points over the last eight trading days.

Stocks are expected to see further volatility as the week progresses, especially with November retail sales figures being released today and the government’s employment report due Friday.

The Dow rose 172.60 points, or 2.1%, to 8,591.69.

Broader indexes also closed higher. The Standard & Poor’s 500 index rose 21.93 points, or 2.6%, to 870.74, while the Nasdaq composite index rose 42.58 points, or 2.9%, to 1,492.38.

The Russell 2,000 index of smaller companies rose 2.7%.

Advancing issues outnumbered decliners by almost 2 to 1 on the New York Stock Exchange.

Shares of Amazon.com jumped 9.8% after research firm ComScore Inc. said online sales surged 15% to $846 million on Monday, which for many people was the first day of work after Thanksgiving, compared with the same Monday a year earlier.

Yields on Treasury obligations fell as the bond market did not share the stock market’s resistance to the day’s bad economic news.

The yield on the benchmark 10-year Treasury note fell to 2.67% from 2.69% late Tuesday. The three-month T-bill, considered one of the safest investments, fell to 0.02% from 0.06%.

The dollar was mixed against other major currencies. Gold prices fell.

Oil futures dropped 17 cents to $46.79 a barrel in New York.

Overseas, key stock indexes rose 1.9% in Japan, 1.1% in Britain, 0.8% in Germany and 0.4% in France.