Bulls Find New Life

Wall Street runs higher, continuing its recovery from Monday's selloff.
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Updated from 4:14 p.m. EST

Stocks closed higher for a second straight session Wednesday as traders had their spirits buoyed by a series of upbeat reports on the economy.

The

Dow Jones Industrial Average

advanced 90.28 points, or 0.74%, to 12,226.73, supported by 2.5% gains in

Exxon Mobil

(XOM) - Get Report

and

Alcoa

(AA) - Get Report

.

The

S&P 500

was up 12.76 points, or 0.92%, at 1399.48, and the

Nasdaq Composite

was higher by 19.62 points, or 0.81%, at 2432.23.

About 2.80 billion shares changed hands on the

New York Stock Exchange

. Advancers beat decliners by nearly a 4-to-1 margin. Volume on the Nasdaq was roughly 1.93 billion shares, with advancers outpacing decliners 2 to 1.

By sector, stocks related to energy were the biggest winners. The Philadelphia Oil Service Sector Index rose 4%, and the Amex Oil Index was up 2.5%. Semiconductor stocks were among the hardest hit, as the Philadelphia Semiconductor Sector Index dipped 0.4%.

A busy week for data continued with the Commerce Department's gross domestic product report showing that the economy grew at a 2.2% annual pace last quarter. The report was the second of three that will be issued on the third quarter, and it exceeded the advance reading of 1.6%. Economists had expected an upward revision to 1.8%.

Still, the growth rate is down from the second quarter's 2.6% pace. In addition, the core personal consumption expenditure price index, which excludes food and energy costs, rose at a 2.2% rate, down from 2.3% in the second quarter.

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"The housing sector and the growing trade deficit were the main culprits," said Peter Morici, a professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission. "Consumers continued to hold up the economy, but with housing and auto sales dropping, it remains to be seen how much longer consumer spending can stave off recession."

Separately, the Commerce Department said new-homes sale dropped 3.2% to 1.004 million annualized units in October, as the median sales price rose 1.2%. Economists anticipated 1.05 million annualized units. On Tuesday, the National Association of Realtors said existing-home sales unexpectedly rose 0.5% in October to 6.24 million annualized units.

The

Federal Reserve

said U.S. economic activity continued to grow moderately between mid-October and November in its regional survey known as the beige book. The report, published for the eighth and final time this year, said most districts characterized growth as moderate. Consumer spending increased in a number of districts, while home and auto-related producers were a drag on manufacturing and sales.

Treasury prices held steady, with the 10-year note ending down 5/32 in price to yield 4.52%. The 30-year bond was lower by 12/32, yielding 4.61%. The dollar managed to gain ground against the euro, ending a six-session decline.

Corporate M&A was in high gear, as reports emerged that Switzerland's Nestle might try to buy Gerber and another business from

Novartis

(NVS) - Get Report

. At the same time, Ireland's Riverdeep reached a $1.7 billion deal for U.S. publisher Houghton Mifflin.

Elsewhere,

Central Parking

(CPC)

hired an adviser to help it find out if anyone might be interesting in buying or merging with it. The company has already held meetings with interested parties. The stock rose 63 cents, or 3.6%, to close at $18.02.

One Dow stock in the news was

Pfizer

(PFE) - Get Report

, which said after the previous close that it would terminate 20% of its U.S. sales force. About 2,750 sales reps could lose their jobs. Pfizer gained 2 cents, or 0.1%, to $27.07.

Among earnings, apparel retailer

Aeropostale

(ARO)

posted third-quarter net income of $32.6 million, or 61 cents a share, up 25% from the year-ago quarter. Revenue rose 19% to $386 million from last year. The Thomson First Call average estimate was for a profit of 61 cents on revenue of $384.4 million.

Aeropostale also offered fourth-quarter guidance that was in line with Wall Street's average estimate. Shares finished higher by $1.98, or 6.8%, to $31.10.

Crude prices surged after of the Energy Department's weekly inventory report showed an unexpected decline in crude stocks. Oil inventories eased by 300,000 barrels and gasoline stocks fell by 600,000 barrels. Distillate inventories were down 1 million barrels. January crude futures jumped $1.47 at $62.46, a rise of 2.4%.

Metals were lower. Gold futures gave back $1.50 to close at $635.50 an ounce, while silver lost 5.5 cents to $13.56 an ounce.

Overnight in Asia, Japan's Nikkei rose 1.4% to 16,076, and Hong Kong's Hang Seng gained 0.8% to 18,780. In Europe, London's FTSE 100 was up 1% to 6084, and Germany's Xetra DAX added 1.3% to 6364.