Updated from 1:50 p.m. EST

In a session of mixed trading, stocks in New York were lately edging higher Wednesday, as investors eyed the prospect of a bailout for the automakers and digested several disheartening economic reports.

The

Dow Jones Industrial Average

was lately adding 52 points at 8471, and the

S&P 500

was gaining 6.6 points to 855. The

Nasdaq

tacked on 18 points to 1468.

Traders were closely watching the automotive sector as the

Big Three U.S. car manufacturers

continued to petition Congress for emergency funds.

Ford

(F) - Get Report

and

General Motors

(GM) - Get Report

on Tuesday had presented business plans to Congress in hopes of garnering a federal bailout. General Motors asked for $12 billion in low-interest financing and a $6 billion line of credit, and Ford requested $9 billion in government aid.

GM and Chrysler also said they would need $4 billion and $7 billion respectively just to make it to the end of 2008. GM President and COO Frederick Henderson said that bankruptcy was not an option for his company, and Chrysler vice chairman Jim Press said that a failure by a major automaker could send the economy into a depression.

Marc Pado, U.S. strategist for Cantor Fitzgerald, said that because it is so difficult to raise money in the open market, the government needs to help the automakers. He also stressed that the deal before Congress is not a bailout, but rather a bridge loan that is a vital prop to the fragile economy. "If you do not want to see 10% unemployment, you need to act on GM and Ford and Chrysler," he said.

Toyota

(TM) - Get Report

, meanwhile, announced it would cut production in December and reduce managers' winter bonuses as it copes with the economic downturn.

Several other bearish data points were dampening sentiment. In its so-called beige book of anecdotal economic information, the

Federal Reserve

said that economic activity has weakened substantially. The Fed also noted an easing in price pressures thanks in part to declining costs in retail goods, raw materials, and foods.

Doug Roberts, chief investment strategist at ChannelCapitalResearch.com, said that the beige book painted a bleak picture, but it wasn't as bad as investors may have feared. He said a slight improvement in housing sales in certain regions and a less disconcerting inflation outlook were modest positives. "Otherwise, it was pretty bad," he said.

November employment figures

from Automatic Data Processing showed that 250,000 jobs had been lost that month, more than the 205,000 anticipated by economists. The October unemployment figure was revised to 179,000 from 157,000.

A November non-manufacturing index from the Institute for Supply Management registered at 37.3, substantially below analysts' prediction of 42 and down from 44.4 in October.

However, revised third-quarter productivity grew at a rate of 1.3%, according to the Department of Labor. The reading was above consensus estimates of 0.9% and up from 1.1% in the second quarter.

"The jobs number is going to be the next big shoe to fall on Friday," said Marc Pado, U.S. market strategist for Cantor Fitzgerald, referring to the Department of Labor's November nonfarm payroll numbers. He said that the ADP data are nevertheless in line with consensus estimates for a loss of 325,000 jobs for the month, and productivity and unit labor costs showed improvement.

Pado said he foresees choppy action in stocks until the end of 2008, then an abatement of selling pressure and a January rebound. "Things don't turn around on a dime," he said.

In a slightly positive development for the housing market, the Mortgage Bankers Association said that mortgage applications rose substantially in the last week, following a decision by the Fed to purchase as much as $500 billion in mortgage-backed securities tied to

Fannie Mae

(FNM)

,

Freddie Mac

(FRE)

and

Ginnie Mae

.

"Today's data suggest there is potential for relief in the housing crisis, and the relief could grow if the Federal Reserve expands its recent initiative to purchase agency and mortgage-backed securities," wrote Tony Crescenzi, chief bond market strategist at Miller Tabak, on his

RealMoney.com blog

. He said an additional stimulus plan from the incoming Obama administration could offer additional incentives for people to buy new homes.

Numerous companies on Wednesday announced changes in their business models and financial policies as the economic environment shifted. Among financial firms,

The Wall Street Journal

reported that

Goldman Sachs

(GS) - Get Report

was thinking about starting an Internet banking business.

Separately,

Bank of America

(BAC) - Get Report

may reduce its headcount by 30,000 as it merges with

Merrill Lynch

(MER)

, according to a report by

CNBC

.

Another report, this time from

Bloomberg

, indicated that Merrill would cut its year-end bonuses in half.

Elsewhere, mining company

Freeport-McMoRan

(FCX) - Get Report

said it was suspending its dividend on declines in copper and molybdenum prices.

BlackBerry maker

Research In Motion

(RIMM)

cut its third-quarter revenue and earnings-per-share forecasts, saying a stronger dollar and weaker U.S. economy would hurt its results.

On the merger front,

Electricite de France

said it was planning to issue a bid of $4.5 billion for U.S. power company

Constellation Energy

(CEG)

.

Shifting to commodities, crude oil was losing 21 cents to $46.75 a barrel. Gold was falling $12.40 to $770.90 an ounce.

Longer-dated U.S. Treasury securities were falling in price. The 10-year note was down 2/32 to yield 2.68%, and the 30-year was losing 8/32 to yield 3.19%. The dollar was rising vs. the euro and pound but falling against the yen.

European exchanges, such as the FTSE in London and the DAX in Frankfurt, were gaining ground. Asian markets, including Japan's Nikkei and Hong Kong's Hang Seng, finished on the upside.