Sydney, Nov 1, 2007 (ABN Newswire) - U.S. stocks shot higher on Wednesday, rallying as the Federal Reserve cut interest rates and reports showed surprising resilience in economic growth and employment. Financial services firms like JPMorgan Chase, Goldman Sachs and Morgan Stanley all gained on the news.

The full report is available at the following video and audio links.

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There was a lot of economic data released during the session including a government report showing the economy grew at a 3.9 percent annual rate in the third quarter after having grown at a 3.8 percent annual rate last quarter. Economists on average expected a 3.1 percent annual rate.

Another government report, the employment cost index, rose a smaller than expected 0.8 percent in the third quarter.

The Chicago Purchasing Managers Index, a regional read on manufacturing, fell to 49.7 in October, from 54.2 in September. Economists thought it would fall to 53.0.

The Commerce Department said September construction spending rose 0.3 percent after falling 0.2 percent in the previous month. Economists thought it would fall 0.4 percent.

And the ADP employment report showed private sector employment rose by 106,000 in October, topping forecasts for a rise of 56,000.

Turning to the markets; Dow Jones Industrials gained 138 points to 13,930; the S&P500 advanced 18 points to 1,549, and the NASDAQ added 42 points to 2,859.
So let's take a look at what moved the markets;

Shares in Kraft Foods rose 2.48% to $33.41 as the company posted a 20 percent drop in quarterly profit, hit by soaring dairy costs, though sales and earnings still beat analysts' estimates. The food company reported third quarter profit of $596 million, or 38 cents a share, compared with $748 million, or 45 cents a share, a year earlier. The better than expected result was largely due to an increased in spending on marketing and new products.
Google's stock hit a new record high and gained 1.76% to $707.00 on the Nasdaq on rumours that it is working on entering the phone market. The Web search leader is reportedly in active talks with No. 2 U.S. mobile carrier Verizon Wireless about putting Google applications on phones it offers.

Mastercard shares traded in record territory, up 20.62 percent at $189.55 as the company posted a quarterly profit above Wall Street estimates. The largest publicly traded credit card network, posted a stronger-than-expected increase in earnings as consumer spending volume rose globally. Revenue rose 20 percent as the number of credit and debit card transactions that MasterCard processed rose 13 percent.

Newmont Mining shares are 9.52% higher at $50.86 after the company said quarterly profit doubled, boosted in part by the soaring price of gold. The results easily surpassed Wall Street expectations and the market seemed to take the news well that the company narrowed its forecast for fourth-quarter sales because of operational challenges in Nevada. The world's No. 2 gold producer said third quarter net earnings were $397 million, or 88 cents per share, up from $198 million, or 44 cents per share, a year earlier.

To the best and worst performers in the NASDAQ Top 100.

Millicom International was the best performer. It was up 8.65% to $117.48. Apollo Group and Autodesk also helped lift the NASDAQ.

Garmin fell the furthest on Wednesday dropping 10.86% to $107.40 after the company made an unsolicited 2.3 billion euro offer for Dutch digital map provider Tele Atlas, trumping an agreed bid from TomTom. NII Holdings and Wynn Resorts were also a drag on the list.

Source: Finance News Network © 2007 http://www.finnewsnetwork.com.au

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