US Stocks Rise After Stronger Data, Fed-Action Hopes; DJIA Up 120

--Stocks gain, investors aim for fourth-straight rise

--ADP employment survey shows 91,000 August increase in private-sector employment

--Chicago-area manufacturing data and factory orders best economist forecasts

By Brendan Conway

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- U.S. stocks advanced Wednesday, putting the market on track to close out August with a four-session win streak, as a round of modestly positive economic data and hopes for further stimulus from the Federal Reserve emboldened investors.

The Dow Jones Industrial Average added 150 points, or 1.3%, to 11710 shortly after the open, edging back into positive territory for 2011. The measure closed 2010 at 11577 and spent most of August beneath that mark. The blue-chip measure was led by Alcoa, which gained 4.2%, and Caterpillar, which added 4.1%.

The Standard & Poor's 500-stock index gained 18 points, or 1.5%, to 1231, led by industrial and materials stocks. The Nasdaq Composite moved up 35 points, or 1.3%, to 2611.

Before the opening bell, a report by Automatic Data Processing showed a modest gain in private-sector hiring. Though the 91,000 figure for August was slightly below economists' expectations, it suggested that the last month's market volatility and investor worries over debt crises in Europe and the U.S. may have had only a modest impact on U.S. hiring. The ADP number is closely watched ahead of Friday's payrolls report, which is the week's key economic data point.

"It's good enough to allow the consumer to keep on nibbling away at retail sales," said Michael Shaoul, chief executive of Oscar Gruss & Son. "You don't need anything better than modest employment growth. You just need it not to be falling apart."

In separate data, a reading on Chicago-area manufacturing beat expectations, raising hopes for a national reading that is due Thursday. Another release showed that U.S. factory orders for July rose 2.4%, ahead of the 2% forecast by economists.

"The stock market has been discounting a double dip, trading down where a double dip is baked into the cake," said Randall Warren, chief investment officer at Warren Financial Service in Exton, Pa. The recent selloff increases the chance that even lukewarm data is greeted positively, he said.

The Dow jumped 410 points in the three sessions before Wednesday. Despite those gains, it's been a tough month for the stock market. The blue-chip index entered the day down 4.8% in August amid wild swings as investors grappled with debt conundrums in Europe and the U.S., amid worries of another economic downturn.

Hopes for further stimulus from the Federal Reserve and broad gains in overseas markets have helped set a positive tone over recent sessions.

The minutes of the last Federal Reserve policy setting meeting, released Tuesday, helped buoy sentiment as it revealed that a third round of asset purchases was raised as a possibility to support the economy and financial markets.

Overseas, Europe markets were broadly higher, with the Stoxx Europe 600 on track to stretch its win streak to three sessions. Asian bourses also gained higher, with Japan's Nikkei Stock Average rising for a fifth straight session.

Gold futures slipped near $1,820 an ounce. Crude oil futures slid to $88.76 a barrel. The U.S. dollar was slightly higher against the euro and the yen.

In corporate news, Oracle rose 2.6% despite a report by The Wall Street Journal that U.S. authorities are investigating whether the software company violated federal antibribery laws in its dealings abroad.

Shares of Clorox shed 0.5% even though the household products company said Carl Icahn's latest offer to buy the company for $78 a share "substantially undervalues the company and is not credible."

Lions Gate Entertainment shed 1.2%. Activist investor Carl Icahn and his son Brett have reached an agreement with the company to sell substantially all of their stake, while also agreeing to dismiss all outstanding litigation and claims between the two parties.

Mining-equipment maker Joy Global's fiscal third-quarter profit jumped 46%, as underground-mining equipment sales climbed and bookings increased. The company also lifted its full-year view. Shares advanced 6.1%.

DryShips dropped 2.8% after the offshore oil-drilling vessel provider reported fiscal second-quarter results that missed expectations.

-By Brendan Conway, Dow Jones Newswires; (212) 416-2670; brendan.conway@ dowjones.com