Markets continue rise as European fears ease

NEW YORK - Stocks resumed their rally Wednesday after a successful auction of Portuguese government debt eased worries about Europe's financial system.

The Dow Jones industrial average gained 46 points, and broader indexes also rose. European markets reversed their losses after the results of the auction were announced.

Major indexes pulled back from their highs in the afternoon after the Federal Reserve said more regions of the country saw slower growth late in the summer. The Fed's "Beige Book" report on regional economic activity showed five of the 12 regions tracked by the Fed showed mixed or slowing activity compared with just two in the most recent report in July.

JPMorgan Chase & Co. and other banks led the market higher, reversing a downturn from the day before.

Energy stocks rose after Fitch Ratings raised its credit rating of BP. BP also released an internal report that largely spread blame from the oil spill in the Gulf of Mexico to rig owner Transocean Ltd. and contractor Halliburton Co. as well as itself.

The Dow gained 46.32, or 0.5 percent, to close at 10,387.01. The S&P 500 index rose 7.03 or 0.6 percent, to 1,098.87, while the Nasdaq rose 19.98, or 0.9 percent, to 2,228.87.

The two-day swing based on the ebb and flow of European debt fears fit into a recent pattern of jittery trading in recent weeks in response to economic news.

"There seems to be a fixation on the latest news and data," said Mike McGervey, president of McGervey Wealth Management. Mixed economic news has kept stocks in a tight range in recent weeks.

European markets rose. 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.

Rick Fier, an equities trader at Conifer Securities, said the elections more than the economy were likely to be the catalyst that moves the market higher in the coming months. Traders are assuming that the recovery will be slow and uneven, but growth will remain in place over the next few months, he said.

In corporate news, 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 14 cents to $10.97 on the cautious outlook.

BP shares rose $1.18, or 3.2 percent, to $38.37. Halliburton rose 37 cents to $30.21.

JPMorgan Chase rose 84 cents, or 2.2 percent, to $39.12.

The Russell 2000 index of smaller-company stocks rose 4.96, or 0.8 percent, to 634.25.

Treasury prices bounced off their lows after an auction for 10-year notes was well-received by investors. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.66 percent from 2.60 percent late Tuesday. Its yield helps set interest rates on mortgages and other loans.