The Dow Jones industrial average was off 46.84 points to close at 9,075.14, and the Nasdaq rose 22.79 points, or over 1 percent, closing at 1,690.20. CNET's technology indexes were mixed.
A report on the gross domestic product (GDP), which measures the dollar value of goods and services produced by the U.S. economy, showed that the economy suffered its worst contraction in a decade. But the decline of 0.4 percent was better than what economists had expected, giving Wall Street reason to cheer.
Economists had expected the GDP to shrink by 1 percent.
The Chicago PMI, or Purchasing Manager's Index, also came in better than expected. The index, which measures manufacturing activity in the Chicago region, fell in October to a seasonally adjusted 46.2, according to the National Association of Purchasing Management. The number was down from September's 46.6, but was much better than the 43 economists had expected, according to a Reuters poll.
However, the number indicates the economy is still deflating; any number below 50 signals a shrinking manufacturing economy, while a reading above 50 indicates expansion.
The reading bodes well for Thursday's report from the National Association of Purchasing Managers, since Chicago's figure makes up a large percent of the overall report.
Wednesday's data was good news for investors, who had sent stocks lower Tuesday following a report that showed the consumer confidence index plunged to 85.5 in October to its lowest level since February 1994. The index, which gauges how cautious consumers are about spending, is an important indicator on what the economy is likely to do in coming months.
Sun Microsystems inspired gains in the tech sector, with a comment that suggested sales were looking higher for the quarter. Shares were up 61 cents to $10.15.
"At this stage, we are tracking ahead linearity-wise (in terms of order flow) where we were last quarter," Steve McGowan, vice president for finance in global sales operations, said at a Prudential Securities technology conference in New York.
CNET's Server Hardware index was up around 9 percent.
Qwest Communications International was a dark spot in the technology sector. Shares tumbled $3.05, or 19 percent, to $12.95 after the company posted a third-quarter loss on lower-than-expected revenues and said fourth-quarter revenues will fall short of Wall Street expectations.
In other negative forecasts, Adobe Systems fell $2.35, or 8 percent, to $26.40 after lowering its fourth-quarter and fiscal 2002 revenue and earnings guidance. The publishing-software maker also said it would cut 150 jobs, or 5 percent of its work force.
Electronics manufacturer SCI Systems, up $1.05, or 5 percent, to $20.31, managed to beat earnings expectations by a penny and keep revenue almost flat with last year's.
Ingram Micro, up 40 cents to $12.80, also topped Wall Street's expectations. The distributor of computer products said it had a third-quarter profit of 4 cents a share, excluding one-time costs. First Call had predicted the company would earn just 2 cents a share.
Among other actively traded shares, Intel rose 88 cents to $24.42, Oracle gained 6 cents to $13.56, and Microsoft lost 73 cents to $58.15.
AOL Time Warner fell 47 cents to $31.10. Yahoo lost 21 cents to $10.88, and Amazon.com was up 56 cents to $6.98.
Staff and Reuters contributed to this report.