Wall St gains amid Fed watch

United States held strong gains after Janet Yellen moved a step closer to becoming the next Federal Reserve leader, adding to positive sentiment from a strong report on the jobs market.

The Dow Jones Industrial Average added 100.63 points, or 0.63%, to 16,001.45 points. During the previous local session, the Dow fell 66 points, or 0.4%, after the minutes to the Fed's last policy meeting showed that a winding down of stimulus was still on the table for December.

The S&P 500 index rose 13.32 points, or 0.75%, to 1,794.69 points, with financial and consumer discretionary shares leading gains in eight of 10 sector groups.

The Nasdaq Composite Index gained 42.41 points, or 1.08%, to 3,963.68 points.

The S&P 500 sustained its third-straight loss on Wednesday, the longest losing streak in nearly two months, amid worries over an impending reduction in stimulus measures.

The Senate Banking Committee voted to approve Ms Yellen's nomination to become Fed chairwoman next year, sending her name to the full Senate for a final confirmation vote after its two-week Thanksgiving break.

"Janet Yellen's approval was well-received by investors as she is perceived as a positive thing for the market," said Richard Sichel, chief investment officer at Philadelphia Trust.

Mr Sichel is optimistic that the market will remain strong. He has maintained an overweight weighting on the financial and industrial sectors, and is looking for technology to pick up after lagging this year.

Andrew Wilkinson, chief economic strategist at Miller Tabak, said the bounce suggests investors are starting to understand that reduced Fed bond purchases, known as tapering, isn't the same as tightening. The Fed will continue to keep short-term interest rates anchored near zero.

"The equity market gets it," Mr Wilkinson said. "Investors are getting beyond the worries that tapering is bad for equities."

Stocks fell Wednesday afternoon after investors were surprised by the minutes to the Fed's October meeting, which revealed a sentiment that expected ongoing improvement in the labor market would warrant trimming the pace of bond purchases "in coming months." Just last week, dovish comments by Fed vice chairwoman Ms Yellen had investors believing that a trimming of purchases in December was off the table.

"The Fed is not in the game of shocking markets," Mr Wilkinson said. "They are in the game of comforting markets. So any market drama is self-induced."

Initial claims for jobless benefits fell to 323,000 in the latest week from a revised 344,000 the week before, and compared with expectations for a drop to 335,000.

Separately, the producer price index for October declined 0.2% on the month, matching expectations. Excluding food and energy components, core PPI increased 0.2% versus forecasts of a 0.1% rise. That means inflation across the economy remains tame.

The Philadelphia Federal Reserve's November index of manufacturing activity tumbled more than expected to 6.5 from 19.8 in October. Economists had forecast a drop to 15.

The yield on the 10-year Treasury note rose to 2.818%--a two-month high — from 2.795% late Wednesday, as worry about tapering continues to hit the bond market, despite the recovery in stocks.

John Carey, manager of Pioneer Investments' Pioneer Fund, said the market is focused too much on the timing of Fed tapering.

"We don't need to be all that worried about when," he said. "If it happens sooner or later is less important than what happens when it happens," he said, noting concern about whether the Fed's interest rate is too low. Mr Carey said he has been more focused on corporate earnings reports.

In Europe, the Stoxx Europe 600 lost 0.2%. Germany's DAX 30 index gave up 0.1% and France's CAC 40 declined 0.3%. The UK's FTSE 100 was little changed.

Markit's composite purchasing managers index for the euro zone fell to 51.5 in November from 51.9 in October, missing expectations of a rise to 52.1. Readings above 50 signal expansion. In France, the PMI returned to contraction, falling to 48.5 from October's 50.5, offsetting a rise in Germany to 54.3 from 53.2.

In currency markets, the dollar was firmer against the yen, but lost some ground against the euro. The greenback was at its strongest level against the yen since July, trading at Yen100.94 from Yen100.03 late Wednesday. The euro was fetching $1.3467, up from $1.3439.

Gold futures extended their losses, dropping 1.3% to $1,242.10 an ounce, after settling Wednesday at the lowest level in more than four months. Crude-oil futures gained 1.5% to $95.22 a barrel.

Asian markets were mostly lower after HSBC's preliminary purchasing managers index for China slipped to 50.4 in November from 50.9 in October, to suggest growth momentum was softening. China's Shanghai Composite eased less than 0.1% and Hong Kong's Hang Seng Index shed 0.5%. Meanwhile, Japanese stocks bucked the regional trend. The Nikkei Stock Average jumped 1.9% to a six-month high as a weaker yen helped bolster exporter shares.

In corporate news, General Motors gained after the US Treasury Department said it plans to sell its remaining stake in the auto maker by the end of the year, completing the final piece of the government's crisis-era bailout.

Target dropped after the discount retailer cut its earnings outlook for the full fiscal year, overshadowing better-than-expected third-quarter adjusted earnings.

Abercrombie & Fitch declined after the teen-apparel retailer reported better-than-expected fiscal third-quarter adjusted earnings but provided a full-year outlook that was below current projections.

Williams-Sonoma rallied after the housewares and furniture retailer topped fiscal third-quarter earnings and revenue estimates and raised its full-year outlook.

Green Mountain Coffee Roasters soared after reporting fourth-quarter profit jumped 38% due to higher sales of the company's single-serve coffee packs and robust demand for its Keurig brewers.