Dow stages late 100-point rally

(CNNMoney.com) -- Blue chips rallied late Wednesday, supporting the broader market, after a Federal Reserve report on the economy added to hopes that the pace of the slowdown is easing.

An unclear outlook from bellwether Intel late Tuesday kept the tech-fueled Nasdaq from posting similar gains.

The Dow Jones industrial average (INDU) gained 109 points, or 1.4%. The S&P 500 (SPX) index gained 10 points, or 1.3%. The Nasdaq composite (COMP) added 1 point, or 0.1%.

Tech shares dragged on the broad market, while consumer, housing, industrial and commodity shares kept losses in check.

Stocks roiled Monday and fell Tuesday in a choppy start to the week following a five-week run. The advance has been driven by bets that the pace of the recession is slowing. A Federal Reserve report released Wednesday afternoon added to those bets.

The Fed's "Beige Book" periodic reading on the economy showed that overall activity stayed weak or got worse. But five of the 12 districts showed a slowdown in the pace of decline and a few more districts showed certain parts of the economy were stabilizing.

"A lot of recent reports are showing that things might be flattening out and bottoming and the Beige Book seemed to indicate that too," said Stacey Shreft, director of investment strategy at The Mutual Fund Store. "That's good, but it's going to be important that the next set of data that come out reinforce it."

Despite some optimism about the economy, the speed of the stock rally has left Wall Street vulnerable to a bit of a pullback.

In five weeks, the Dow gained 22%, its biggest consecutive five-week run on a percentage basis since 1933, when it gained 31%. The run up followed a rout that left the Dow and S&P 500 at 12-year lows and the Nasdaq at 6-year lows.

This week, stocks have been seesawing.

"I think this is a necessary consolidation at the start of what is supposed to be one of the worst reporting periods in years," said John Forelli, portfolio manager at Independence Investments.

But he said that any consolidation this time is likely to be more modest than the selloffs that followed other big rallies over the last six months.

"Investor sentiment has been improving because there's more confidence about the financial sector," he said. "There could be a 10 or 15% selloff after the rally, but there isn't the sense of panic that would cause a 25% selloff."

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UBS faces $1.8 bln loss and steps up job cuts

(MarketWatch) -- UBS shares fell as much as 9% Wednesday after the struggling Swiss bank said it expects to post a loss of nearly 2 billion Swiss francs ($1.8 billion) for the first three months of 2009 and added that nearly 9,000 more staff will lose their jobs.

The group said it will reduce its workforce to around 67,500 in 2010, from the current 76,200, which will help it slash costs by between 3.5 billion francs and 4 billion francs. Roughly 2,500 of the cuts will be in Switzerland.
In a statement UBS's newly appointed chief executive, Oswald Gruebel, also said that despite positive early signs, clients continued to withdraw their cash in the quarter.

Gruebel, a former head of arch-rival Credit Suisse, was hired in January to try and turn around the bank, but he told shareholders at the annual meeting Wednesday that there will be no quick fix.

Investors weighed the worse-than-expected quarterly loss against the group's deep cost-cutting plans, pushing the stock down around 9% in early trading before it recovered to trade down 3.2%.

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