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Stocks edge higher on hope for China stimulus

Steve Rothwell, AP Business Writer

FILE - In this Nov. 15, 2012, file photo, traders work on the floor at the New York Stock Exchange, in New York. World stock markets meandered Tuesday, Dec. 4, as traders weighed a surprise drop in U.S. factory production against hopes that the U.S. will avoid the so-called fiscal cliff. (AP Photo/Seth Wenig, File)

NEW YORK (AP) -- Stocks edged higher on Wall Street Wednesday after the Chinese government pledged to maintain policies intended to strengthen the world's second-largest economy.

The Dow Jones industrial average rose 42 points to 12,994 as of 9:55 a.m. EST. The Standard and Poor's 500 was up half a point to 1,408. The Nasdaq composite was down 11 points to 2,985.

Stocks have traded sideways for almost two weeks as investors wait for developments from Washington on crucial budget talks to avoid the "fiscal cliff," a series of sharp government spending cuts and tax increases scheduled to start Jan. 1 unless an agreement is reached to cut the budget deficit. Economists say that the measures, if implemented, could push the U.S. back into recession.

Citigroup rose $1.41 to $35.70 after the bank said it plans to eliminate more than 11,000 jobs to cut expenses and improve efficiency. Freeport-McMoRan Copper & Gold plunged $4.89 to $33.44 after the mining company said it is buying oil companies Plains Exploration & Production and McMoRan Exploration for about $9 billion.

A private survey showed Wednesday that U.S. businesses added fewer workers in November, in part because Superstorm Sandy shut down factories, retail stores, and other companies. Payroll processor ADP said employers added 118,000 jobs last month. That's below October's total of 157,000, which was revised lower. Investors will also look to the monthly jobs report from the Labor Department Friday for more information about how the economy is doing.

The yield on the 10-year Treasury note fell 2 basis points to 1.59 percent.

—Mattress Firm Holding Corp. fell $6.92 to $23.52 after the mattress retailer said late Tuesday that sales trends were softening.

—Pandora Media, an internet radio company, fell $1.26 to $8.19 after saying it would make a much larger loss in the fourth quarter than analysts had been forecasting.