Stocks rise modestly following service sector growth; investors await release of Fed minutes

Stocks edge higher after services report

NEW YORK — Traders are making modest moves on the stock market ahead of the release of minutes from the Federal Reserve’s latest meeting.

Stocks edged higher Wednesday after the Institute for Supply Management said its services industry index rose to 50.1 in December from 48.7 in November. Any reading above 50 signals growth.

Investors will be looking closely at the Fed’s minutes for clues about when the central bank might move to raise interest rates.

At midday, the Dow Jones industrial average is up 16 at 10,588. The broader Standard & Poor’s 500 index is up 1 at 1,138, while the Nasdaq composite index is up 1 at 2,309.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Traders made modest moves Wednesday following mixed economic reports and ahead of minutes from the Federal Reserve’s last meeting.

Stocks rose slightly on signs of growth in the services industry but the gains were marginal. The Institute for Supply Management said its services index rose to 50.1 in December from 48.7 in November but came in below expectations. Any reading above 50 signals growth.

The positive news about service companies was offset by a report showing that 84,000 private sector jobs were lost last month. The ADP National Employment Report came in worse than the forecasts of analysts polled by Thomson Reuters.

Peter Cardillo, chief market economist at the brokerage Avalon Partners Inc. in New York, said investors are holding back ahead of the release of minutes from the Fed’s minutes because they are hoping to learn more about the central bank’s next moves on interest rates. The release is set for 2 p.m. EST.

“Investors are trying to get some insight on what the Fed is really thinking,” Cardillo said, noting that any hint of stronger economic activity could signal policymakers will boost rates sooner than expected to curb inflation. Higher rates could risk stalling the economic recovery.

Traders also appear to be holding back ahead of a key employment report coming up Friday from the Labor Department. Economists expect that the unemployment rate ticked up to 10.1 percent in December from 10 percent in November.

The Dow Jones industrial average rose 14.58, or 0.1 percent, to 10,586.60. The broader Standard & Poor’s 500 index rose 0.92, or 0.1 percent, to 1,137.44, while the Nasdaq composite index rose 2.11, or 0.1 percent, to 2,310.82.

Trading turned quiet Tuesday after a strong rally on Monday lifted stocks to 15-month highs on the first trading day of 2010.

Bond prices fell, pushing their yields higher. The yield on the benchmark 10-year Treasury note rose to 3.83 percent from 3.76 percent late Tuesday.

The dollar was mixed against other major currencies. Gold rose.

Crude oil fell 81 cents to $82.58 per barrel on the New York Mercantile Exchange.

About three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 375.8 million shares, compared with 396.1 million shares traded at the same point Tuesday.

The Russell 2000 index of smaller companies rose 2.38, or 0.4 percent, to 640.87.

In afternoon trading, Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index rose 0.1 percent, and France’s CAC-40 rose less than 0.1 percent. Japan’s Nikkei stock average rose 0.5 percent.

Augstums reported from Charlotte, N.C.