Stocks Inch Higher as Debt Worries Ease09/08 09:22

   Stocks rose Wednesday as investors brushed off fresh worries about the 
health of European banks to resume a rally.

   NEW YORK (AP) -- Stocks rose Wednesday as investors brushed off fresh 
worries about the health of European banks to resume a rally.

   Strong demand at an auction for Portugal's debt early Wednesday helped 
relieve some concerns that resurfaced this week about the health of Europe's 
banking industry. European markets turned positive after the results of the 
auction were announced.

   The Dow Jones industrial average rose nearly 60 points in morning trading. 
Broader indexes also rose modestly.

   Financial stocks got a lift from the dwindling concerns about Europe's banks.

   Worries about how European government debt might drag down a global recovery 
halted a four-day winning streak Tuesday. Stocks rallied last week after 
reports on manufacturing and employment were better than expected.

   A report due out Wednesday afternoon from the Federal Reserve could provide 
further insight into the pace of the domestic recovery. The Fed's "beige book" 
report will break down economic activity across the country by region.

   The Fed has been cautious in its statements about the economy in recent 
months. Any signs of encouragement from the central bank could be considered 
further confirmation of last week's economic reports and restart the rally.

   In early morning trading, the Dow rose 58.80, or 0.6 percent, to 10,399.49. 
The Standard & Poor's 500 index rose 6.40, or 0.6 percent, to 1,098.24, while 
the Nasdaq composite index rose 13.99, or 0.6 percent, to 2,222.88.

   Britain's FTSE 100 rose 0.4 percent, Germany's DAX index gained 0.8 percent, 
and France's CAC-40 rose 0.9 percent.

   About four stocks rose for every one that fell on the New York Stock 
Exchange, where volume came to a light 98.8 million shares. Volume remains 
light, which means many traders are avoiding stocks altogether. Many investors 
are waiting to get a better sense of the pace of recovery and to see what might 
happen during November's elections.

   In corporate news, shares of BP PLC rose after Fitch Ratings upgraded the 
company's debt. The oil company also released an internal report about the oil 
spill in the Gulf of Mexico that deflected much of the blame to rig owner 
Transocean Ltd. and contractor Halliburton Co. Its shares rose $1.30, or 3.5 
percent, to $38.49.

   Women's clothing retailer Talbots Inc. said its fiscal second quarter profit 
rose, but its outlook for the third quarter fell short of expectations. Shares 
dropped 96 cents, or 8.6 percent, to $10.15 on the cautious outlook.

   U.S. Treasury prices fell as investors moved back into riskier stocks. The 
yield on the 10-year Treasury note, which moves opposite its price, rose to 
2.65 percent from 2.60 percent with late Tuesday. Its yield is often used to 
help set interest rates on mortgages and other consumer loans.


(KM)