Stocks Bounce Back Despite Weak Services Sector

U.S. stocks finished higher Wednesday as investorslooked beyond a weak reading on the U.S. services sector and overseas debt issues and interest-rate hikes. The Dow Jones Industrial Average closed up 56.15 points, or 0.45%, at 12,626.02. The S&P 500 Index increased by 1.34 points, or 0.10%, to close at 1,339.22, and the Nasdaq Composite Index rose 8.25 points, or 0.29%, to close at 2,834.02.

The services sector grew at a slower pace in June, according to a survey of senior executives. The Institute for Supply Management on Wednesday said its services index fell to 53.3% last month from 54.6% in May. Economists surveyed by MarketWatch expected the services index to drop to 54.0%.

President Barack Obama says the debt ceiling should not “be used as a gun against the heads” of Americans to retain breaks for corporate jet owners or oil and gas companies. Obama is seeking to reduce the deficit, in part, through new tax revenue raised by closing loopholes and tax subsidies.

China raised a key interest rate Wednesday for a third time this year as it tries to cool surging inflation. The benchmark rate for one-year loans will be raised 0.25 percentage points to 6.56 percent, effective Thursday, the central bank announced.

Benchmark crude-oil futures settled lower Wednesday. Crude for August delivery fell 24 cents, or 0.2%, to settle at $96.65 a barrel on the New York Mercantile Exchange.

Quick on the heels of Google’s launch of its latest social-networking venture, Facebook said Wednesday that its 750 million users will now be able to make video calls on the site. The feature will be powered by the Internet phone service Skype. Facebook also redesigned its chat feature, so that the people a user messages the most often show up first.