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US STOCKS-Wall St climbs in low-volume session

Published 09/08/2010, 03:39 PM
Updated 09/08/2010, 03:44 PM

* Shares bounce back from Tuesday lows

* Staples, Costco rise after Goldman upgrades

* Indexes up: Dow 0.6 pct; S&P 0.8 pct; Nasdaq 1.1 pct (Updates to late afternoon)

By Edward Krudy

NEW YORK, Sept 8 (Reuters) - U.S. stocks rose in another low-volume session on Wednesday as investors continued to asses the prospects for the global economy after last week's sharp bounce in equity markets appeared to halt the August sell-off.

U.S. bank stocks recovered from Tuesday's losses, with JPMorgan Chase and Co up 2.1 percent, after a successful Portuguese debt offering helped sentiment, along with news from Ireland that nationalized lender Anglo Irish Bank would be split to wind down its assets.

The euro recovered against the dollar and yen following the news. The BKW bank index rose 1.6 percent.

The U.S. economy remains at the forefront for investors. The Federal Reserve's Beige Book compilation of anecdotal reports confirmed the economy had begun to slow over the summer, a fact that sent stocks sharply lower in August but had little impact on the session.

"The overall macro picture is what is going to drive stocks ultimately," said Jim Maguire Jr, a floor trader on the New York Stock Exchange at E.H. Smith Jacobs. The market "is still highly focused on the jobs picture."

The Dow Jones industrial average rose 59.83 points, or 0.58 percent, at 10,400.52. The Standard & Poor's 500 Index added 8.96 points, or 0.82 percent, at 1,100.80. The Nasdaq Composite Index added 23.43 points, or 1.06 percent, at 2,232.32.

On Tuesday, stocks fell in light volume as investors seized on renewed concerns about European banks' exposure to sovereign debt to sell shares after strong gains last week when the S&P 500 jumped more than 5 percent in three days.

This week has been shortened by the Labor Day holiday on Monday, while the Rosh Hashanah holiday could mean staffing and trading volume are reduced on Thursday and Friday, with potential for more volatility.

An inverse head and shoulder formation has developed in the S&P 500 chart, a sign technical analysts believe could show the market has bottomed. The "neck line" is around the 1,130 mark, suggesting a possible break-out rally if stocks move above that.

"You're in the process of building a base here," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco. "The June, August highs of 1,130 are the key points, if you break above that then the year-end projection ... becomes a fairly obvious upside projection."

U.S.-traded shares of BP Plc rose 3.2 percent at $38.39 after it issued an internal report on the rig explosion that led to the worst U.S. oil spill ever and the death of 11 crew members.

BP deflected much of the blame, claiming drilling contractor Transocean Ltd missed danger signs and criticized the cementing of the well conducted by Halliburton Co. Transocean gained 1.9 percent to $54.02, while Halliburton added 1.3 percent to $30.24.

Staples Inc was up 2.4 percent to $19.11, and Costco Wholesale Corp rose 1 percent to $59.20 after Goldman Sachs upgraded their stocks. (Editing by James Dalgleish)

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