(Updated with market reaction)

NEW YORK (

TheStreet

) -- Economic activity in the state of New York picked up in early December, the New York Federal Reserve's Empire State Manufacturing Survey revealed on Wednesday.

The general business conditions index swung to 10.6 after coming in at a negative 11.4 in November. The level was much higher than consensus expectations which had forecast the index to rise to 3.

The rise was driven by new orders and shipments with the indexes climbing above zero in both cases to 2.6 and 7.1. Unfilled orders remained negative while inventories were lower. The Index for employment also dipped, pointing to still weak employment conditions in the sector.

Forward-looking indicators pointed to ongoing optimism about future conditions. The future new orders and shipments indexes were also relatively high, with the latter continuing a four-month streak of rising values. Future employment indexes were positive and little changed.

Regional surveys are less important than the national ISM numbers that will be released in early January.

Still, they reflect the most recent data available on economic activity and the improvement in the numbers act as further indication that the economy might be on its way to a speedier recovery.

On Friday, investors will be watching out for the Philadelphia Fed's survey of manufacturing activity. The index is expected to dip to 13 in December from 22 in November.

The

SPDR S&P 500 ETF

(SPY) - Get Report

, the

SPDR Dow Jones Industrial Average ETF

(DIA) - Get Report

and the

PowerShares QQQ

(QQQQ)

were falling in premarket trading as eurodebt concerns resurfaced.

--Written by Shanthi Bharatwaj in New York

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