Wall Street has withstood another stream of bad economic readings, shaking off its disappointment and closing sharply higher after an erratic session.

Recession Defined

The major indexes fluctuated throughout the day as investors shuttled between pessimism about a protracted recession and hopes that the nation might start to soon see relief. Analysts largely believe that much of the bad news is already priced into the market. But they also warn that the market could turn lower as November retail sales and employment reports are issued Thursday and Friday.

Wednesday's news included dismal readings on regional economic growth from the Federal Reserve and service-sector activity from the Institute for Supply Management.

The Dow Jones industrial average bolted up 172 points to 8,591. All the major indexes rose more than 2 percent.

On Tuesday, the Dow Jones industrials closed up 270 points at the 8,419 level, one day after falling nearly 680. All three major indexes closed higher.

Auditors: Feds Not Watching Bailout Funds

News from federal auditors could have some effect on the markets Wednesday.

The first comprehensive review of the $700 billion rescue package said the oversight is needed to ensure that banking institutions limit their top executives' pay and comply with other restrictions.

The Government Accountability Office report concluded that the Treasury Department has no mechanism in place to track how institutions are using $150 billion that the government injected into the banking system as of last month.

The auditors acknowledged that the program, created Oct. 3 to help stabilize a rapidly faltering banking system, was less than 60 days old and has been adjusting to an evolving mission.

But the 72-page report was bound to feed congressional concern that banks and other institutions are not being properly monitored and are not using the money to increase lending.