Showgoers visit the Intel booth on the first day of the Consumer Electronics Show (CES) in Las Vegas in this January 8, 2013, file photo.

SAN FRANCISCO | Thu Jan 17, 2013 7:43pm EST

SAN FRANCISCO (Reuters) - Intel Corp forecast quarterly revenue that disappointed Wall Street and a sharp increase in capital spending it plans for 2013 unnerved investors already concerned about slow demand for personal computers.

Shares of the world's leading chipmaker slid more than 5 percent in after-hours trade on Thursday after it projected this year's capital spending at $13 billion, plus or minus $500 million, exceeding many analysts' estimates for about $10 billion.

Intel said $2 billion of its increased expenditures would go toward expanding a facility for researching future manufacturing technology. Some analysts worried that with PC sales already slow, expanding too quickly may create excess capacity that could hurt the bottom line.

"People are starting to freak out about the capex," said Sanford C. Bernstein analyst Stacy Rasgon. "The concern is that if I spend a lot of money and I build up my factories, I don't have enough demand to fill them. They have very high fixed costs, and it pulls your margins down."

Outgoing Chief Executive Paul Otellini, who plans to retire in May after a successor is identified, said the investment in manufacturing would lower costs in the long run.

"The leading edge capacity is the lowest cost for us on a per unit basis," Otellini told analysts on a conference call. "Regardless of what you think the size of the market is, the leading edge fabs are the single greatest asset that we have."

Otellini said the higher capex is not intended to bankroll a foundry or contract chipmaking business, but he did not rule out manufacturing semiconductors for other chip companies as long as that did not empower a rival.

Intel has agreed to manufacture custom chips on behalf of networking equipment company Cisco Systems Inc, Bloomberg reported on Thursday. An Intel spokesman declined to comment.

In the fourth quarter, Intel's revenue was $13.5 billion, compared with $13.9 billion a year earlier. Analysts had expected $13.53 billion.

It estimated first-quarter revenue of $12.7 billion, plus or minus $500 million. Analysts expected $12.91 billion.

STRUGGLING IN MOBILE

Intel is used to being king of the personal computer market, particularly through its historic Wintel alliance with Microsoft Corp, which has led to breathtakingly high profit margins and an 80 percent market share.

But it has struggled to adapt its technology for smartphones and tablets, a market dominated by Qualcomm Inc, Samsung Electronics Co Ltd and Nvidia Corp. PC makers are struggling to stop a decline in sales as consumers hold off on buying new laptops in favor of more nimble mobile gadgets.

Microsoft's long-awaited launch of Windows 8 in October brought touchscreen features to laptops but failed to spark a resurgence in sales that Intel and many PC manufacturers had hoped for.

Intel's hefty investment plans reflect its confidence in the future, even as Wall Street worries about the chipmaker's struggle to gain traction in the mobile market.

"Our core advantage really is our manufacturing leadership," Chief Financial Officer Stacy Smith told Reuters. "450 will give us a significant cost advantage relative to others."

Intel is expanding its research fab in Hillsboro, Oregon, to develop technology for manufacturing chips on 450 mm silicon wafers, a complicated step up from the current 300 mm wafer standard.

Larger wafers can translate into big savings because more chips can be etched onto each of them. But building 450 mm plants is expected to be so expensive that only a few industry leaders, including Intel, Samsung Electronics and TSMC, are expected to have the necessary scale.

Some Wall Street analysts gave Intel high marks for expected operating efficiency this year.

"The revenue isn't going to be there, but the margin and expense control is going to stabilize the bottom line," said Cody Acree, an analyst at Williams Financial. "I think it's probably a success if you can be flat in an industry that most people expect to be flat to down."

Intel foresees first-quarter gross margins of 58 percent, plus or minus two percentage points. Analysts on average expected gross margins of about 56 percent for the current quarter, according to Thomson Reuters I/B/E/S.

It estimated a 2013 gross margin of 60 percent, plus or minus a few percentage points. Analysts on average had expected 59 percent.

Net earnings in the December quarter were $2.5 billion, or 48 cents a share, compared with $3.4 billion, or 64 cents a share, year-ago period.

Analysts had expected 45 cents, and said the surprisingly strong performance was partly due to a lower effective tax rate of 23 percent. This was below Intel's forecast of about 27 percent.

Still, shares of Intel fell 5.6 percent in after-hours trade to $21.43, after closing up 2.58 percent at $22.68 on the Nasdaq.

"This is a company that is continuing to spend money to participate in the market. That may concern some investors," said Doug Freedman, an analyst at RBC Capital.

(Reporting by Noel Randewich; Editing by Richard Chang and Steve Orlofsky)

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An illustration picture shows a Google logo with two one Euro coins, taken in Munich January 15, 2013.

SAN FRANCISCO | Fri Jan 18, 2013 3:46pm EST

SAN FRANCISCO (Reuters) - Google Inc issued a rare advisory to Wall Street on Friday that analyst estimates for its fourth quarter financial results are flawed.

The world's No.1 search engine, which reports its quarterly results on Tuesday, said most analysts have not adjusted their estimates to reflect the pending $2.35 billion sale of the Motorola Home business.

The business must be presented separately from the results of Google's continuing operations under U.S. accounting rules, Google Treasurer Brent Callinicos wrote in a post on Google's investor relations Web page on Friday.

"As of this writing, a majority of Wall Street analysts who cover Google have not reflected the Home business as discontinued operations in their estimates," Callinicos wrote.

The discrepancy means the fourth-quarter net revenue that Google reports on Tuesday could appear to be less than the $12.34 billion average that analysts polled by Thomson Reuters I/B/E/S are expecting.

Raymond James analyst Aaron Kessler says his fourth-quarter net revenue estimate includes nearly $900 million from the Motorola Home business.

"They're saying that the headline number is going to be less than what most analysts have for Q4," said Kessler.

The advisory is a rare move for Google, which does not provide financial forecasts and typically has limited interactions with analysts. The company has in the past provided accounting advisories to analysts about the Motorola Mobility business, which Google acquired for $12.5 billion in May.

Google bought Motorola Mobility primarily for its large portfolio of communications patents and its mobile phone business.

In December, Google agreed to sell the Motorola Home television set-top box business to Arris Group Inc for $2.35 billion in cash and stock.

Analysts expect Google to report adjusted earnings of $10.56 per share for the fourth quarter.

"It's a little surprising that they're doing this the Friday before the report," said Kessler. "They should have put it out a week ago if they wanted analysts to change their numbers."

(Reporting By Alexei Oreskovic. Editing by Andre Grenon)

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n">(Reuters) - Shares of Facebook Inc recovered from an 8 percent slide on Thursday, finishing the regular session down less than 1 percent, as Wall Street's initial alarm over mobile revenue results and spending plans subsided.

Facebook said on Wednesday that fourth-quarter mobile advertising revenue doubled from the third quarter, but the results failed to live up to some investors' high expectations. Chief Executive Mark Zuckerberg's comments about boosting spending in the coming year signaled that profit margins will be under pressure, adding to concerns.

"The initial fast money said earnings are going down, numbers are coming down, the stock is going to get hit," said Macquarie Research analyst Ben Schachter.

"But the more people thought about it throughout the day, the momentum changed and longer-term investors won out, saying these are investments we think they should be making," he said.

Facebook has long established itself as one of the most popular websites with more than a billion users, but investors have worried that until the company's mobile advertising strategy takes off, revenue growth will remain shaky.

Three brokerages downgraded the stock, but most analysts said investor expectations were too high and Facebook's mobile advertising business was a good long-term bet.

Pivotal Research Group analyst Brian Wieser upgraded Facebook to a "buy" rating on Thursday, calling Wall Street's reaction to the results "downright dazed."

The stock market incorrectly interpreted Facebook's "mobile revenue figures as a negative when in fact they are part of a story that we can see as qualitatively more favorable," Wieser said.

Shares of the company finished regular trading on Thursday down 0.8 percent at $30.98 on the Nasdaq. Earlier in the session, the stock fell as low as $28.74. Facebook stock has lost more than a quarter of its value since its botched debut in May.

The company reported a better-than-expected fourth-quarter profit on Wednesday and said mobile advertising revenue doubled to $306 million, suggesting it was making inroads into handheld devices such as smartphones and tablets.

Investors were looking for at least $350 million in mobile advertising revenue, Piper Jaffray analyst Gene Munster said in a note to clients.

"While the trajectory of mobile growth may not be as steep as some investors were hoping, the theme of mobile as the future of Facebook remains intact," Munster said.

BMO Capital Markets analyst Daniel Salmon, however, said Facebook's 2013 stock performance would not be dictated by its ability to generate mobile ad dollars. He downgraded the stock on Thursday to "market perform" from "outperform."

Salmon said new catalysts were necessary to drive Facebook's stock price up.

(Reporting by Neha Alawadhi and Sayantani Ghosh in Bangalore and Alexei Oreskovic in San Francisco; editing by Saumyadeb Chakrabarty and Matthew Lewis)

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Speaker of the House John Boehner (R-OH) (front, in green tie) walks with Congressman Dave Camp (R-MI) (R) after a meeting with House Republicans about a ''fiscal cliff'' deal on Capitol Hill in Washington January 1, 2013.

NEW YORK | Wed Jan 2, 2013 12:16am EST

NEW YORK (Reuters) - U.S. stocks are poised for gains to begin the year after the late passage of a bill to avoid harsh tax hikes that would have hit most Americans and crimped economic growth.

However, harsh reality awaits any euphoria that comes from avoiding the "fiscal cliff". In two months, battles over further spending cuts and, in particular, the U.S. federal debt limit will come to a head.

The House of Representatives voted for a bill passed on Monday by the Senate that will raise taxes on wealthy individuals and families and preserve certain other benefits that will, together, soften some of the blow that would have been sustained without an agreement to avoid the fiscal cliff.

That puts Wall Street in prime position to begin 2013 with a rally, even if thorny issues remain to be addressed in the coming months in Washington.

Asian markets extended gains modestly, with the MSCI Asia Pacific ex-Japan index of stocks up 1.7 percent. U.S. markets will not have a chance to react until 6 a.m. ET, when futures trading begins after the New Year's Day holiday.

"When you separate the fundamentals of the economy from the headlines, the fundamentals really suggest we can support higher prices in the new year," said Bill Vaughn, equity portfolio manager at Evercore Wealth Management in San Francisco.

The Standard & Poor's 500 stock index ended the year up 13 percent, its best gain since 2009, mostly shrugging off the debt-related worries that dominated headlines during the year.

Equity markets held up in the last two months of the year as well, expecting a resolution to head off $600 billion in spending cuts and tax hikes that could push the economy into recession if they stay in effect for long. While the deadline to avert the cliff was December 31, legislation can be formulated to retroactively prevent going over.

The back-and-forth in recent weeks has primarily been of concern to businesses, where confidence has eroded. Some slowing in economic growth due to the impasse is expected, but that may play into the hands of value investors if the market corrects in coming months.

"It appears as though politics will dominate for some time," said Richard Bernstein, chief executive of Richard Bernstein Advisors in New York. "That being said, equity market valuations already reflect this ... the stock market is attractive from my perspective."

Stock markets around the world were closed Tuesday because of New Year's Day. Some Republicans in the House had expressed concern on Tuesday afternoon that a bill would not be finished before U.S. markets open.

Many traders will still be away from their desks because of the holiday, indicating trading volume will stay near its recent low levels. The anemic action, coupled with uncertainty over the cliff, resulted in a spike of volatility in December, with the CBOE Volatility index jumping 13.5 percent in the month.

DEBT CEILING BATTLE REMAINS

The bill that passed does not contain the kind of spending cuts that many conservative Republicans favor in order to bring down the high U.S. federal debt.

Even as this battle recedes, markets will look ahead to another fight in the next few months, this time over whether Congress will approve an increase in the U.S. debt ceiling.

The White House has said it will not negotiate the debt ceiling as in 2011, when the fight over what was once a procedural matter preceded the first-ever downgrade of the U.S. credit rating. But it may be forced into such a battle again. A repeat of that war is most worrisome for markets.

"The spending side fight looms and it will be tougher," said David Kotok, chairman and chief investment officer at Cumberland Advisors in Sarasota, Florida. "The Republican caucus is tighter on that side."

Markets posted several days of sharp losses in the period surrounding the fight in 2011. Even after a bill to increase the ceiling passed, stocks plunged in what was seen as a vote of "no confidence" in Washington's ability to function, considering how close lawmakers came to a default.

Economists at Goldman Sachs, in a note Tuesday, said the coming fight to raise the debt ceiling -- where Republicans are likely to demand spending cuts while President Obama pushes for more taxes -- "is likely to be at least as politically difficult as the last increase was in the summer of 2011."

During this fight, the markets have been less volatile, largely because the effects of the spending cuts and tax hikes will be gradual, and there was an ongoing expectation that a retroactive fix was in the offing.

(Additional reporting by David Gaffen, David Randall, Chuck Mikolajczak and Richard Leong; Editing by Neil Fullick and Paul Tait)

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1 of 4. Trader Fred Demarco works on the floor of the New York Stock Exchange, October 12, 2012.

NEW YORK | Fri Oct 12, 2012 8:12pm EDT

NEW YORK (Reuters) - Stocks wrapped up their worst week in four months, led lower on Friday by financial shares as results from Wells Fargo and JPMorgan ignited concerns about shrinking profit margins for big lenders.

Shares of Wells Fargo (WFC.N) fell 2.6 percent to $34.25 and JPMorgan Chase & Co (JPM.N) lost 1.1 percent to $41.62 as concerns grew over their lower net interest margin - the difference between what a bank pays on deposits and what it makes on loans - which could narrow further as the Federal Reserve keeps interest rates near zero.

The lackluster market reaction came even though both Wells Fargo and JPMorgan, the two largest U.S. financial stocks by market value, reported record profits.

"Bank shares as a group have had a nice move (up) this year so far," said Ken Polcari, managing director at ICAP Equities in New York. "Guidance is cautious so people are taking money off the table."

The results sparked a selloff in other bank shares. An S&P financial index .GSPF, down 1.4 percent, represented the worst performer of the S&P 500's top 10 sectors. The KBW Bank index .BKX lost 2.5 percent.

Polcari said the low volume that came with this week's decline indicated this was not a sign of panic. Since hitting a near five-year intraday high of 1,474.51 on September 14, the benchmark S&P 500 Index has fallen 3.1 percent.

"If we keep getting negative reports, selling will pick up," he said.

Expectations are low for S&P 500 companies' results. Quarterly earnings are forecast to fall 3 percent from a year ago, compared with a 2.1 percent drop estimated at the start of the month, according to Thomson Reuters data.

The Dow Jones industrial average .DJI edged up 2.46 points, or 0.02 percent, to 13,328.85 at the close. But the S&P 500 .SPX fell 4.25 points, or 0.30 percent, to finish at 1,428.59. The Nasdaq Composite .IXIC dipped 5.30 points, or 0.17 percent, to 3,044.11.

The S&P 500 closed right above its 50-day moving average, barely enough to avoid going into the weekend with a technical red flag hanging over the market.

Despite several encouraging data points this week, the benchmark S&P 500 fell 2.2 percent - its worst weekly performance since the week ended June 1.

Shares of Workday Inc (WDAY.N), a cloud computing company that has yet to turn a profit, soared nearly 74 percent to $48.69 in their market debut, driving some tech analysts to question the lofty valuation.

Advanced Micro Devices Inc (AMD.N) fell 14.4 percent to $2.74 a day after the chipmaker said its third-quarter revenue probably fell 10 percent from the previous quarter as a weak global economy and a growing preference for tablets slams the PC industry.

About 5.5 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.52 billion shares.

On the NYSE, about seven issues fell for every four that rose. On the Nasdaq, almost two issues fell for every one that advanced.

Earlier in the session, the market was supported by Thomson Reuters-University of Michigan data showing U.S. consumer sentiment unexpectedly rose to its highest in five years in October, in the latest in a string of encouraging signs about the economy.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)

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Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New York October 5, 2012.

NEW YORK | Tue Oct 9, 2012 9:39am EDT

NEW YORK (Reuters) - U.S. stocks edged lower after the open on Tuesday with investors having little reason to buy equities after the recent rally as they waited for the start later on Tuesday of the U.S. quarterly earnings season.

The Dow Jones industrial average .DJI was down 22.73 points, or 0.17 percent, at 13,560.92. The Standard & Poor's 500 Index .SPX was down 2.27 points, or 0.16 percent, at 1,453.61. The Nasdaq Composite Index .IXIC was down 9.84 points, or 0.32 percent, at 3,102.52.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)

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Traders work on the floor of the New York Stock Exchange September 18, 2012.

NEW YORK | Sun Oct 7, 2012 5:26am EDT

NEW YORK (Reuters) - Wall Street may be bracing for a pullback as U.S. earnings season begins next week - if the clouds of profit warnings from bellwethers ranging from FedEx to Hewlett-Packard lead to a downpour of lower profits - or even losses.

Thanks to aggressive stimulus plans from central banks around the world, the Standard & Poor's 500 index .SPX gained 5.8 percent over the third quarter. That sharp rally occurred even as companies were struggling. Earnings for that period are forecast to fall 2.4 percent from the year-ago quarter. If that happens, this would be the first earnings decline in three years, according to Thomson Reuters data.

Market strategists and investors say U.S. stock valuations are broadly out of sync with earnings estimates. They forecast a pullback in stocks in the coming weeks as more companies report results and reduce expectations for the fourth quarter and beyond.

Fourth-quarter estimates for S&P 500 companies show a 9.5 percent gain in profit from a year ago, according to Thomson Reuters data. Analysts say that outlook is too high, given what investors are already hearing from the corporate world.

"It's a divergence right now where the valuations as far as equity prices (are concerned) have soared, and are really putting in place a stronger economy and stronger fundamentals," said Alan Lancz, president of Alan B. Lancz & Associates Inc., an investment advisory firm in Toledo, Ohio.

"But earnings will be the telltale sign," Lancz added. "And if the guidance isn't particularly strong, the market might be setting itself up for a little disappointment. I don't see a major correction, but I do see a pullback."

The earnings season will kick off on Tuesday with results from Dow component Alcoa (AA.N) after the bell. Analysts expect Alcoa's third-quarter results to show it broke even, down from a profit of 15 cents per share a year earlier, according to Thomson Reuters I/B/E/S. [ID:nL1E8KQHC5]

JPMorgan Chase & Co (JPM.N) and Wells Fargo (WFC.N), the first big financial names to report, are also on tap next week.

BLAME EUROPE

Nearly half of S&P 500 companies guiding lower for third- quarter earnings blamed weakness in Europe, according to a Thomson Reuters survey. Another 11 percent blamed the weak global economy, 8 percent cited strength in the U.S. dollar, and 6 percent cited the slowdown in China, the survey showed.

Weakness in the U.S. economy hasn't helped. The final read on U.S. second-quarter gross domestic product last month showed growth of just 1.3 percent, weaker than an expected 1.7 percent.

On Thursday, software maker Informatica Corp (INFA.O) issued a profit warning and said business conditions were worsening in Europe. The software company is considered a bellwether because its products are used alongside those made by larger software companies. [ID:nL3E8L44YO]

"Parts of Europe aren't just in recession, they're in depression," said Jeff Kleintop, chief market strategist at LPL Financial in Boston. "I think (analysts) underestimated the extent of the global slowdown, and maybe are still underestimating it."

TECH FEELS CHILL FROM CHINA

While estimates have come down sharply in all 10 S&P 500 sectors since the start of the year, technology is one area where the lower expectations are most notable. Slower growth in China is a big factor in that trend.

Earnings growth in the tech sector is expected to be just 2.3 percent for the quarter, compared with a July 1 forecast of 13.1 percent. Apple Inc (AAPL.O) is a big driver of those gains.

Technology's profit growth has been crucial for the S&P 500. Minus technology, S&P 500 earnings are expected to be down 3.4 percent.

The tech sector is where the slowdown in China's economy is having the biggest impact, Kleintop said.

"They consume a lot of U.S. technology products," he said.

Recent data shows that the pace of growth in China, the world's second-largest economy, may slow for a seventh quarter, straining earnings in the tech and materials sectors. [ID:nL1E8L4DUF]

Applied Materials Inc (AMAT.O) lowered its third-quarter estimates in August, citing China and Europe. On Wednesday, the chip gear maker said it planned to cut its global work force by 6 percent to 9 percent.

FedEx Corp (FDX.N), the world's second-largest package delivery company, cut its fiscal 2013 forecast on September 18, saying a weakening global economy gives its customers a reason to switch to less expensive and slower shipping options. FedEx said its earnings could drop as much as 6 percent for its fiscal 2013 year, which will end in May. [ID:nL1E8KI5V0]

On Wednesday, shares of Hewlett-Packard Co (HPQ.N) fell a whopping 13 percent to a nine-year low after it forecast a far steeper-than-expected drop in 2013 profit. The slide in HP's stock price sharply cut the Dow industrials' gains for the day. [ID:nL1E8L39JP]

The S&P 500 sectors showing the biggest projected earnings decline are materials, forecast down 24 percent, and energy, expected down 18.8 percent, Thomson Reuters data show, with those declines tied largely to the global slowdown.

In contrast, consumer discretionary stocks are expected to have the strongest profit growth for the quarter, with Thomson Reuters data showing a gain of 7.7 percent. But in that sector, too, companies, including apparel retailer Express Inc (EXPR.N) - not an S&P 500 component - have warned about the third quarter. [ID:nL3E8L26XS]

ANEMIC REVENUE OUTLOOK

With tepid revenue growth, U.S. companies have been topping Wall Street's earnings expectations in recent quarters through cost reductions. That path to beating profit forecasts, however, will become increasingly difficult as many companies have already made most of the obvious cuts.

"Forward expectations are just too high," said Barry Knapp, managing director of equity research at Barclays Capital in New York.

Revenue for the third quarter is expected to be down 0.1 percent from a year ago for S&P 500 companies, and down 0.4 percent minus Apple, Thomson Reuters corporate earnings research analyst Greg Harrison said.

In all, the negative-to-positive ratio for earnings forecasts is 4.3 to 1, the most negative since the third quarter of 2001, he said.

Tech and materials were also among sectors with the most negative outlooks for the quarter, with tech's negative-to-positive guidance at 5.4 to 1 and materials at 7 to 1.

Corporate America's concerns were exemplified by General Electric Co (GE.N) Chief Executive Jeff Immelt, who told a meeting of analysts and investors last week: "I think the United States is OK. Europe, we remained concerned about. Asia - our part of Asia, particularly China, is not that bad."

(Reporting by Caroline Valetkevitch; Additional reporting by Steve James and Chuck Mikolajczak in New York and Scott Malone in Boston; Editing by Tiffany Wu and Jan Paschal)

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Traders work on the floor of the New York Stock Exchange, July 10, 2012.

NEW YORK | Sat Sep 29, 2012 4:17am EDT

NEW YORK (Reuters) - Wall Street will open October with a busy week, highlighted by low expectations for global manufacturing data and the U.S. jobs report, but that could set the stage for positive surprises that help lift the market.

The S&P 500 .INX.SPX finished its third positive quarter in the last four on Friday, despite suffering its largest weekly percentage decline since June. For the past three months, the S&P 500 gained 5.9 percent - its best third quarter since 2010. In contrast, the index was down 1.3 percent for the week.

The benchmark S&P 500 earlier this month reached its highest level since late 2007. Yet uncertainty remains over whether stocks can hold their gains against the headwinds of a struggling economy. That explains, in part, the retreat over the last several days.

The S&P 500 hit a high of 1,474.51 in mid-September before pulling back by a bit more than 2 percent. A run at 1,500 seems possible, but the flurry of economic and world events ahead probably will prevent a major advance in the coming week.

Bulls are betting this week's Spanish budget proposals will be a preamble to a bailout request by Mariano Rajoy's government. The move would be seen as a first step to get the finances of the euro zone's fourth-largest economy in order and would clear some of the market uncertainty regarding the euro zone crisis.

Monetary policy is also on the list of market catalysts next week. Federal Reserve Chairman Ben Bernanke is scheduled to speak on Monday and the minutes of the latest FOMC meeting are set for release later in the week. The week's agenda includes meetings of the European Central Bank, the Bank of England and the Bank of Japan.

"I think we could see a rebound next week if we get some of the stars aligning and have Spain ask for a bailout, the ECB announcing favorable terms for that bailout, and if we see the Bank of Japan announce further monetary intervention," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

"If Spain and the ECB don't deliver, we could set ourselves up for a further lateral move in the markets. A negative would be if Rajoy flat-out denies that they need a bailout."

The ECB and BOJ are set to meet on Thursday, with the Bank of Japan's meeting extending until Friday.

FACTORIES, JOBS AND THE DEBATES

Chinese factory and business conditions data will kick off a numbers-heavy calendar for markets. Manufacturing PMI, due on Monday, is expected to show a second straight month of contraction.

A snapshot of U.S. manufacturing activity will be provided on Monday when the Institute for Supply Management releases its September index. The September ISM reading is expected to show another month of contraction, but at a slightly slower pace than in August. On Wednesday, the ISM will release its U.S. services-sector Purchasing Managers' Index, which could show a slight deceleration in the pace of growth in the non-manufacturing sector.

"We have Chinese economic data over the weekend, and we'll see how markets react on Monday," said Wasif Latif, vice president of equity investments at San Antonio, Texas-based USAA Investment Management.

"It seems like the market is bracing for bad numbers, meaning if they're not as bad, it could be market-positive," Latif said.

Non-farm payrolls for September, due on Friday, are seen up 115,000, while the U.S. unemployment rate is seen ticking up 0.1 percent from August to 8.2 percent in September.

The jobs data will come on the heels of the first of three U.S. presidential debates, scheduled for Wednesday night. Recent poll numbers point to a strengthening lead by President Barack Obama, but a weak payrolls reading could give some hope to Republican challenger Mitt Romney.

"If Romney doesn't turn the ship with a very strong (debate)performance, the president is going to win," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

He said the trend in the polls has taken away some of the market uncertainty regarding the presidential election. He added that an ECB- or Spain-related headline out of Europe on Thursday could overcome almost anything that would happen Wednesday night during the debate.

"I think the market is coming to terms with the fact the president is ahead, and unless something significant changes, (he) will prevail."

(Wall Street Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)

(Editing by Jan Paschal)

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Traders work on the floor of the New York Stock Exchange, September 20, 2012.

NEW YORK | Thu Sep 27, 2012 4:44pm EDT

NEW YORK (Reuters) - The S&P 500 snapped a five-day string of declines in a broad-based rally on Thursday, as Spain's plans for economic reform eased some worries about one of the euro zone's most troubled countries.

The benchmark S&P 500 rose 1 percent, its biggest percentage gain since the Federal Reserve announced its plan for a third round of stimulus on September 13.

Spain announced a detailed timetable for economic reforms for the fiscally troubled nation and a tough 2013 budget based mostly on spending cuts.

"Any information that gives some understanding about what's going to happen is good for the market. It's small news, but more certainty is good," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois.

The EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said Spain's detailed timetable for economic reforms goes beyond what the European Commission has asked of Spain. Rehn said it is an ambitious step forward.

Gold stocks ranked among the day's bigger gainers in the wake of Spain's news; the PHLX gold/silver index .XAU jumped 3 percent.

Adding to the rally was a last-minute push by investors to reposition portfolios ahead of the quarter's end, with the S&P 500 on track for a gain of 6.2 percent in the third quarter. Friday will be the quarter's last trading day.

"What we've seen is broadly a consolidation, but also an attempt by fund managers to position properly for the rest of the year, to be in the best sectors," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

The Dow Jones industrial average .DJI shot up 72.46 points, or 0.54 percent, to 13,485.97 at the close. The Standard & Poor's 500 Index .SPX rose 13.83 points, or 0.96 percent, to finish at 1,447.15. The Nasdaq Composite Index .IXIC gained 42.90 points, or 1.39 percent, to close at 3,136.60.

While the Nasdaq led Thursday's gains, it also led the market's declines earlier this week - its volatility possibly reflecting investors' nervousness about the U.S. economic outlook, analysts said.

Apple (AAPL.O), up 2.4 percent at $681.32, gave the biggest lift to the Nasdaq. The semiconductor index .SOX gained 2.3 percent, bolstering the Nasdaq 100 .NDX. Intel Corp (INTC.O) was up 1.9 percent at $23.09.

After the bell, U.S.-listed shares of Research In Motion (RIMM.O) surged 15 percent to $8.21 after the Canadian maker of the BlackBerry reported a smaller-than-expected quarterly loss.

On the deal-making front, Tempur-Pedic International Inc (TPX.N) agreed to buy rival mattress maker Sealy Corp (ZZ.N) for about $242 million and assume about $750 million in debt. Tempur-Pedic shares jumped 14.4 percent to $30.64, while Sealy's stock rose 2.3 percent to $2.19.

In the earnings realm, Discover Financial Services (DFS.N) reported third-quarter earnings that beat expectations - and its shares climbed 7.3 percent to $39.71.

Stocks were rising before Spain's announcement on hopes that China would take steps to spur its slowing economy.

China has severely underestimated this year's global economic slowdown, and further cuts to Chinese interest rates or bank reserve requirements will hinge on any new deterioration in the external environment, a central bank adviser said on Thursday.

U.S. economic data was mixed. A report showed initial jobless claims dropped by 23,000 to 359,000, sharply exceeding the decline of 4,000 that had been expected.

But the final read on second-quarter gross domestic product showed growth of just 1.3 percent, weaker than an expected 1.7 percent. And August durable goods orders tumbled 13.2 percent, much more than the expected drop of 5 percent.

Volume was below average at roughly 5.74 billion shares traded on the New York Stock Exchange, the Nasdaq and the Amex, compared with the year-to-date average daily closing volume of 6.53 billion.

Advancers outnumbered decliners on the NYSE by a ratio of slightly more than 3 to 1,and on the Nasdaq, about three stocks rose for every one that fell.

(Editing by Jan Paschal)

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