U.S. Stocks Find Footing After a Weak Start

Updated from 11:56 a.m. EST

Stocks in the U.S. had earlier been hit by a series of gloomy economic reports, but were lately working higher after President-elect Barack Obama added former Federal Reserve Chairman Paul Volcker to his economic team.

The Dow Jones Industrial Average, down some 168 points earlier, was lately up 34 points at 8513, and the S&P 500 was adding 7 points at 865. The Nasdaq was leading the move higher with a gain of 34 points at 1498.

The major averages had earlier been trading with losses following the release of numerous economic reports, many of which accentuated investor pessimism about the future of U.S. companies.

• The Census Bureau reported that durable-goods orders declined 6.2% in October, a bigger drop than the 2.5% expected by economists. The September figure was revised down to a 0.2% decline from a 0.8% increase.
• The Chicago Purchasing Managers Association's index of manufacturing activity came in at 33.8, well below the consensus estimate of 38.5 and down sharply from October's read of 37.8.
• October new-home sales data from the Department of Commerce showed a bigger-than-expected decline to an annual rate of 433,000 homes, the slowest rate of sale since January 1991.
• The Commerce Department's read on personal income showed a 0.3% uptick for October. Analysts had forecast a income growth of 0.1%. Spending slowed by 1%, its broadest decline since September 2001.
• A consumer-sentiment survey from the University of Michigan yielded a read of 55.3, another sharp decline from the previous month.
• In one positive development, weekly initial jobless claims data from the Census Bureau showed claims were down 14,000 to 529,000 for the week ended Nov. 22. The previous claims figures were revised up by 1,000 to 543,000.

"I think most of these bad numbers are baked in," said Larry Adam, chief investment strategist at Deutsche Bank. He said that although many of the data releases were weaker than analysts had expected, they are consistent with what the market has seen since October. "When the numbers get a little bit less bad ... I think that'll actually help the market."

Outside of domestic indicators, China's central bank announced it cut its benchmark interest rate by 1.08%, a move that reflects increasing concern that one of the world's fastest-growing economies has slowed considerably.

Troubles weren't confined to Asia. The European Commission on Wednesday called for a $256 billion economic stimulus plan to help the continent alleviate its own recessionary woes.

As data releases painted a picture of the downturn, President-elect Barack Obama staged a press conference to name former Fed Chair Paul Volcker to head a White House advisory board geared at steering the U.S. through the current financial turmoil.