NEW YORK, Dec 3 (Reuters) - U.S. stocks rose on Wednesday as news pointing to a deepening recession spurred investors to buy defensive stocks, including the shares of biotechnology companies.
Shares of soft-drink maker Coca-Cola (KO.N: Quote, Profile, Research, Stock Buzz) rose more than 3 percent, making the stock a top boost to the Dow.
Shares of Gilead Sciences (GILD.O: Quote, Profile, Research, Stock Buzz) , up 3.3 percent, led the Nasdaq's advancers as investors bet that the incoming administration of President-elect Barack Obama might be more favorable to their prospects.
Another standout was hamburger chain McDonald's Corp (MCD.N: Quote, Profile, Research, Stock Buzz), whose shares rose more than 2 percent.
The rise in defensive stocks helped offset concerns sparked by gloomy corporate outlooks from companies, including mining company Freeport-McMoRan Copper & Gold Inc (FCX.N: Quote, Profile, Research, Stock Buzz) , which suspended its dividend, cut its 2009 capital expenditure budget and slashed its copper output.
Additionally, ADP Employer Services said before the bell U.S. private employers slashed the biggest number of jobs in seven years in November, two days before the release of the government's unemployment figures.
"The ADP report is part of the reason the market opened down and why people are moving toward defensive positions," said Peter Jankovskis, director of research at OakBrook Investments LLC in Lisle, Illinois. "There are people bracing for the November payrolls report on Friday. We are in a very nervous market."
The Dow Jones industrial average .DJI rose 101.79 points, or 1.21 percent, to 8,520.88. The Standard & Poor's 500 Index .SPX climbed 11.54 points, or 1.36 percent, to 860.35. The Nasdaq Composite Index .IXIC shot up 29.72 points, or 2.05 percent, to 1,479.52.
The market had rebounded on Tuesday, helped by reassuring comments from General Electric (GE.N: Quote, Profile, Research, Stock Buzz), but with the United States officially mired in a year-old recession, stocks have had only isolated rallies that have sputtered out, and the benchmark Standard & Poor's 500 index is down 42 percent for the year.
The ADP data offered more evidence of the extent of the recession, which began a year ago and has been marked by the housing downturn and rising unemployment. A bleak jobs picture creates a major headwind as the market attempts to recover from lows going back nearly 11 years.
ADP also bumped up the number of jobs cut in October.
Sentiment was also jolted by a report that showed the vast services sector contracted further in November, sending the non-manufacturing sector gauge of the Institute for Supply Management to a record low. [ID:nN03324601]
Besides a boost from biotech shares, the Nasdaq also got a lift from shares of big-cap technology companies after Cisco Systems Inc (CSCO.O: Quote, Profile, Research, Stock Buzz) said it did not plan layoffs at this point.
That reassuring view sent Cisco shares up 3 percent to $15.78 and helped shares of Research In Motion (RIM.TO: Quote, Profile, Research, Stock Buzz) (RIMM.O: Quote, Profile, Research, Stock Buzz) reverse an earlier slide triggered by its profit warning. RIM shares were up 1.2 percent at $37.78 after falling as low as $35.09 earlier.
But slackening demand sent Freeport 18 percent lower to $77.77. Aluminum producer Alcoa (AA.N: Quote, Profile, Research, Stock Buzz)
