Stocks jump on data, commodities; Thornburg sinks

By Ellis Mnyandu

NEW YORK (Reuters) - U.S. stocks rose on Wednesday as evidence the services sector may not be as weak as feared allayed investors' concerns about a recession and soaring commodity prices lifted energy and mining companies' shares.

Data on the U.S. services sector, which makes up roughly 80 percent of the economy, shrank less than expected, overshadowing a surprising decline in private-sector employment for February.

A startling drop in U.S. oil supplies lifted crude futures to a record in New York, boosting shares of oil companies, including Chevron Corp (CVX.N), whose stock jumped 2.4 percent.

Surging metal prices lifted shares of mining companies, including Freeport McMoRan Copper & Gold Inc (FCX.N), whose stock finished up 5.2 percent.

Data from the Institute for Supply Management showing less deterioration in the vast services sector in February underpinned the market.

"It certainly is nice to see a bit of a bounce for a change," said Peter Jankovskis, director of research at OakBrook Investments LLC, in Lisle, Illinois,

The report on the vast services sector from the Institute for Supply Management "would suggest that there is some strength out there and, hopefully, the economy is beginning to re-accelerate," he said.

The Dow Jones industrial average .DJI ended up 41.19 points, or 0.34 percent, at 12,254.99 -- snapping a four-day losing streak. The Standard & Poor's 500 Index .SPX finished up 6.95 points, or 0.52 percent, at 1,333.70. The Nasdaq Composite Index .IXIC closed up 12.53 points, or 0.55 percent, at 2,272.81.

Chevron shares ended at $88.79 on the New York Stock Exchange, and contributed the most to the gains of both the Dow and the S&P 500.

Shares of mining company Freeport McMoRan closed at $104.08, while those of oil services company Schlumberger Ltd (SLB.N) advanced 3.9 percent to $87.85.

U.S. crude gained after Tuesday's sharp drop and OPEC oil ministers left output unchanged, as expected. A report showed a large and unexpected drop in U.S. supplies of crude. Crude oil futures for April delivery settled at a record $104.52 per barrel, up $5, or 5 percent, on the New York Mercantile Exchange.

On the Nasdaq, shares of software maker Microsoft Corp (MSFT.O) led the session's advancers to finish up 1.9 percent at $28.1199.

Jefferies & Co, a brokerage, started coverage of Microsoft with a "buy" rating, saying the company's bid to take over Internet media company Yahoo Inc (YHOO.O) was likely to go through. Yahoo shares climbed 2.2 percent to $28.67.

AMBAC DISAPPOINTS

But trading was volatile and at one point, the market briefly succumbed to pressure from a sell-off in financial stocks that came from disappointment in a plan to shore up the No. 2 bond insurer's balance sheet.