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Encouraging news from Europe helped ignite stock prices in October. This week, investors will shift their focus to U.S. economic data, which might temper their exuberance.

Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve’s policy meeting and Fed Chairman Ben Bernanke’s quarterly news conference.

A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing. Yet the news may have also raised unrealistic expectations about the economy. Investors could end up disappointed.

“There’s a big difference between avoiding recession and stronger growth,” said Eric Green, chief U.S. economist at TD Securities. “The economic data will be OK, but it’s not going to be a catalyst to move stocks up” significantly.

Last week, investors were cheered by the deal European leaders reached Thursday. European banks agreed to take a 50 percent loss on their holdings of Greek government bonds. They will also set aside more money to cushion against future losses.

Leaders also pledged to expand the European Union’s bailout fund.

The announcement catapulted U.S. stocks. The Dow Jones industrial average rocketed 339 points Thursday and appears headed for its sharpest monthly gain since 1987.

Economists caution that European officials must still fill in the details of their plan and implement it. Even then, it might not work. When world leaders meet in France on Thursday and Friday, investors will want to see signs that China and other nations are prepared to help bolster Europe’s bailout fund.

For all that, some stock analysts remain bullish.

“The market was priced for meltdown, and didn’t get it,” Green said. “However inadequate the European package may appear, it is a decisive step in the right direction.”

Stocks had plummeted in September over fears that Europe’s debt burdens would trigger a financial catastrophe. With those fears fading, U.S. stock prices looked cheap last week, analysts said.

The U.S. economy appears more resilient than it did in August, when worries had grown that the United States would fall back into recession. Consumers’ sentiment tumbled that month after Congress fought over raising the nation’s borrowing limit and Standard & Poor’s downgraded long-term U.S. debt.

Yet the economy managed to expand in the July-September quarter at the healthiest pace in a year. Despite their gloomy outlook, consumers spent more. Companies increased their investment in software and equipment.

The focus on Europe “taught us something very important,” said David Kelly, chief market strategist at J.P. Morgan Fund. “Despite all the turmoil in Europe and the drop in confidence caused by it, the U.S. economy is still growing.”

All that makes the Fed less likely to announce any new steps Wednesday at the end of its two-day policy meeting no fax cash loans. Several members of the policy committee have suggested more action may be needed to try to help the economy _ perhaps another round of bond purchases to further cut long-term interest rates. But few analysts expect any such announcement yet.

Three of the 10 members of the policymaking committee have dissented from the Fed’s smaller-scale efforts to boost growth in recent months. Two of the three are scheduled to lose their voting privileges in 2012.

Investors might welcome a quiet Fed meeting, analysts said. It would suggest that the economy might be able to recover on its own.

“Every time the Fed administers medicine to the economy, it convinces people that the economy is sick,” Kelly said. “There would be incredible cheering if the Fed decided that the economy is on the mend and no further action is required.”

Also Wednesday, the central bank will update its economic forecasts, which Bernanke will discuss at his news conference. The Fed is expected to revise down its estimates for hiring and growth from its last forecast in June. Investors will scrutinize how Bernanke explains any such revisions.

The Fed’s meeting will be followed by the most closely watched economic indicator the government releases: the monthly jobs report.

The economy is growing, but not enough to generate many jobs for the 14 million people unemployed. Employers added 103,000 net jobs in September. That wasn’t enough to lower the unemployment rate, which has been stuck 9.1 percent for three months.

Analysts expect roughly 100,000 jobs to be added in October. Anything less could raise concerns that the economy may slow. Stocks might stumble.

A gain of 100,000 jobs is scarcely enough to keep up with population growth. More than double that total would be needed consistently to reduce unemployment significantly.

“The jobs report will be a sobering reminder … that all is not well with the economy,” said Dan Greenhaus, chief global strategist at brokerage firm BTIG.

This week will bring other economic reports, too. The Institute for Supply Management, a trade group of purchasing executives, will issue its surveys of purchasing managers for manufacturing and service-sector companies. Those will provide early reads of whether growth will accelerate in the final three months of the year or drop back.

And automakers will report their October sales, a gauge of whether consumers are willing to make big purchases. Consumer sentiment has fallen to recession levels. But that doesn’t necessarily mean shoppers will reduce their spending.

The auto sales data, in particular, will show “what the consumer does, not what the consumer says,” said Jerry Webman, chief economist at OppenheimerFunds.

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Americans are making a little more money and spending a lot more.

Under normal circumstances, that would be a troubling sign for the economy. But a closer look at some new government figures suggests another possibility: People are saving less money because they’re earning next to nothing in interest.

Saving is already difficult because of more expensive gas and food. It’s even tougher because of the lower returns _ the flip side of super-low interest rates that the Federal Reserve has kept in place since 2008 to help the economy.

Critics say the Fed is punishing those who play by the rules _ those careful enough to set aside money for savings or people who built up a nest egg and are living on fixed incomes that depend on interest.

Americans spent 0.6 percent more in September, three times the increase from the previous month, the government said Friday. Spending was especially strong on durable goods _ things like cars, appliances and electronics.

At the same time, what they earned was mostly flat. Pay increased 0.3 percent, and overall income just 0.1 percent. After deducting taxes and adjusting for inflation, income fell for a third straight month.

So to make up the difference, many have cut back on savings. The savings rate fell to its lowest level since December 2007, the first month of the recession _ and right about the time the Fed started its dramatic series of interest-rate cuts.

Considering how little you can get for parking your money at a bank, it hasn’t been a tough choice.

“Consumers have hit a level of saturation in their savings,” said Marshal Cohen, chief industry analyst with market research firm The NPD Group. “The propensity is to spend.”

The annual yield on six-month certificates of deposit was unchanged this week at 0.23 percent, according to Bankrate.com. Five years ago, it was 3.62 percent. If you put your money in the six-month CD today, you’d make about enough to buy a burger.

Paul Ashworth, chief U.S. economist at Capital Economics, said the trend could mean more spending by Americans. But it will take robust personal spending _ along with improvement in the depressed housing market _ to get the economy going again.

Ashworth said his firm is not too concerned with the decline in savings because it partly represents “a sharp decline in debt servicing costs.” In other words, low interest rates mean it’s cheaper to borrow money.

The Fed began cutting interest rates four years ago at the start of the financial crisis. The rate cuts took the federal funds rate, the key for short-term interest rates, from 5.25 percent down to near zero, where they have stayed since December 2008.

The central bank has said it will keep rates super-low into 2013 as long as the economy stays weak. While that means low returns for savers, it is designed to encourage people and businesses to borrow more.

Many borrowers tend to be young families who are spending most of their income anyway. The loss in interest income tends to hit older households, which are saving for retirement and counting more on bonds and other fixed-income securities.

Consumer spending is closely watched because it accounts for about 70 percent of economic activity. A sharp rise in spending over the summer helped the overall economy grow in July, August and September at the fastest pace in a year.

Still, the economy would have to grow twice as fast to put a dent in the unemployment rate, which has stayed near 9 percent since the recession officially ended more than two years ago.

At the same time savings accounts and other fixed-income investments are paying less, the cost of food and gas has gone up.

Elizabeth Smith, who works in teacher education at the University of Arkansas, has cut her monthly contribution to her retirement savings in half to meet necessities.

“Every time I go to the store, butter, cheese and milk are more expensive,” she said. Child care costs for her two children have also risen this year.

On the other hand, Smith has benefited from lower interest rates. She and her husband refinanced the mortgage on her home a year ago, which lowered their monthly payments by $200, freeing up more cash.

The Fed’s policies are “designed to reward spending and effectively punish savers,” said Eric Green, chief U.S. economist at TD Securities.

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Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said Thursday its earnings dropped by more than a third in the latest quarter amid uncertainties about the global economy.

The company which supplies chips for use in gadgets including Apple’s iPhones and iPads said its third quarter net profit of 30.4 billion New Taiwan dollars ($1 billion) was down 35 percent from last year and down 15.5 percent from the second quarter of this year.

Quarterly revenue totaled $3.5 billion, down 5 percent from a year earlier and 3.6 percent lower than the second quarter.

TSMC’s customers are either uncertain about their outlook or expecting a weaker first quarter of 2012, Chairman Morris Chang told an investor conference in Taipei.

Company officials said shipments have declined for chips used in computers, consumer and industrial electronics, while handset chips sales have expanded freecreditscore. But newly installed production using the cutting-edge 28 nanometer process could help improve profit margins next year, they said.

Chang said the current economic landscape was not as severe as the winter of 2008 when the world was mired in a financial crisis. He said TSMC expects its wafer shipments to pick up by March next year with customers rebuilding the inventories they’ve depleted in the last quarter.

“Perhaps … we may suddenly find a surge that’s amazingly strong,” he said.

TSMC has diversified into solar panels and LED lights, two sectors facing losses because of oversupplies.

But Chang said TSMC is in the startup stage in both sectors and has not been hurt by the sharp price declines.

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Rupert Murdoch’s News International promised to pay all of News of the World editor Andy Coulson’s legal fees only a month after he resigned from the paper in disgrace, according to a court document obtained by The Associated Press on Tuesday.

The former editor, who later served as communications director for Prime Minister David Cameron, is a central figure in the phone hacking scandal that has convulsed the British media. He’s been arrested on suspicion of abetting a culture of illegal spying while at the top of the News of the World, an allegation he’s fighting with the help of the high-powered international law firm DLA Piper.

Such an open-ended promise to foot Coulson’s legal bill would have been highly unusual, according to Jo Keddy, an employment partner with the London law firm Winckworth Sherwood. She called it the equivalent of “writing a blank check for a former employee.”

The generous deals struck by News International with its victims and former staff members have emerged as a key issue for lawmakers investigating the scandal, with some suggesting that the company had tried to buy the silence of those involved to help bury the scandal, which first erupted more than five years ago.

The exact nature of the promises made to Coulson are under dispute.

According a nine-page lawsuit filed by Coulson in the court’s Queen’s Bench Division, News International subsidiary News Group Newspapers has recently refused to pay expenses incurred by Coulson’s criminal defense team, telling him that allegations of phone hacking fell “outside the scope of your contract of employment.”

Coulson’s lawyers reject the assertion, saying that News Group had made a blanket deal to pay any legal fees stemming from his time at the News of the World.

The complaint says News International struck the deal with Coulson in February 2007, a month after his royal editor, Clive Goodman, was jailed for hacking into the phones of members of the royal household. While Coulson denied knowing anything about the practice, he said he was resigning out of a sense of responsibility for what happened.

Goodman’s sentence was meant to draw a line under the scandal, but Coulson’s deal appeared to suggest that both parties feared trouble down the line.

The lawsuit says that News International promised to repay Coulson for “any professional (including without limitation, legal and accounting) costs and expenses … which arise from his having to defend, or appear in, any administrative, regulatory, judicial or quasi-judicial proceeding as a result of his having been the editor of the News of the World.”

The suit goes says that “it was anticipated” that Coulson would be drawn into the criminal investigation into phone hacking which was relaunched early this year.

News International declined to comment on the suit. DLA Piper, Coulson’s law firm, did not immediately return an email seeking further comment on Coulson’s complaint.

Coulson was arrested over the phone hacking allegation on July 8 _ making him one of more than a dozen former News of the World employees who’ve been arrested since the beginning of the year. The scandal has led to the closure of the 168-year-old paper and the resignation of several top Murdoch executives.

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Forecasters say Tropical Storm Rina has formed in the Caribbean Sea off the coasts of Honduras and Nicaragua and it could become a hurricane by the end of the week.

The U.S. National Hurricane Center said Sunday night that the storm’s center was located about 115 miles (185 kilometers) northeast of Cabo Gracias on the border of Honduras and Nicaragua.

It had maximum sustained winds of 40 miles per hour (64 kph) and was moving north-northwest at 8 mph (13 kph) quick payday loans.

A tropical storm watch was in effect on the coast of Honduras from Punta Castilla eastward to the Nicaraguan border.

Forecasters expect Rina to gain strength in the next 48 hours and said it could become a hurricane by the end of the week.

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NATO said its commanders were not aware that Libyan dictator Moammar Gadhafi was in a convoy that NATO bombed as it fled Sirte, as NATO’s governing body gathered Friday to decide how to end its bombing campaign in Libya.

The success of NATO’s seven-month military operation in Libya has helped reinvigorate the Cold War alliance and polished the reputation of France and Britain, the two countries that drove it forward. Analysts attributed its success to the fact that NATO remained steadfast over the summer during a long and grinding stalemate against Gadhafi loyalists and avoided the temptation to send ground troops into Libya.

In a statement Friday, the alliance said an initial Thursday morning strike was aimed at a convoy of approximately 75 armed vehicles leaving Sirte, the Libyan city defended by Gadhafi loyalists. One vehicle was destroyed, which resulted in the convoy’s dispersal.

Another jet then engaged approximately 20 vehicles that were driving at great speed toward the south, destroying or damaging about 10 of them.

“We later learned from open sources and allied intelligence that Gadhafi was in the convoy and that the strike likely contributed to his capture,” the statement said.

After Libya’s former rebels killed Gadhafi on Thursday, officials said they expected the aerial operation to end very soon. But the North Atlantic Council may also decide to keep air patrols flying for several more days until the security situation on the ground stabilizes.

The final decision will depend on the recommendation of Adm. Jim Stavridis, the supreme allied commander, and the Military Committee, the highest military organ.

NATO’s Secretary-General Anders Fogh Rasmussen says the end of the campaign “has now moved much closer.” He has also hailed the success of the mission, saying that it demonstrated that the alliance continues to play an “indispensable” role in confronting current and future security challenges business card.

NATO warplanes have flown about 26,000 sorties, including over 9,600 strike missions. They destroyed Libya’s air defenses and over 1,000 tanks, vehicles and guns, as well as Gadhafi’s command and control networks.

The daily airstrikes finally broke the stalemate that developed after Gadhafi’s initial attempts failed to crush the rebellion that broke out in February. In August, the rebels began advancing on Tripoli, with the NATO warplanes providing close air support and destroying any attempts by the defenders to block them.

French President Nicolas Sarkozy said Friday that “the operation has reached its end.” But how to draw down the campaign will be decided “with our allies and also with input from the (interim government).”

But in London, Britain suggested that NATO may not immediately complete its mission in Libya, wary over the potential reprisal attacks by remaining Gadhafi loyalists.

“NATO will now meet to decide when the mission is complete, and once we are satisfied that there is no further threat to the Libyan civilians and the Libyans are content, NATO will then arrange to wind up the operation,” British Defense Secretary Philip Hammond told BBC radio.

Sarkozy, British Prime Minister David Cameron and President Barack Obama discussed the NATO campaign in a video conference late Thursday.

“They discussed the need to maintain the NATO-led operation while a threat remained to civilian life,” a spokeswoman for Cameron’s office said, on customary condition of anonymity.

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Associated Press writers Elaine Ganley in Paris and David Stringer in London contributed to this report.

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Capital One Financial Corp. says its third-quarter profit edged up 1 percent, despite a big drop in the amount of loans written off as uncollectible.

The McLean, Va.-based bank says Thursday its net income for the September quarter was $813 million, or $1.77 per share.

Total revenue rose 4 percent to $4.2 billion.

Wall Street was expecting profit of $1.68 per share, on revenue of $4.04 billion.

The bank, best known for its ubiquitous “What’s in your wallet?” advertising campaign, said it wrote off $812 million in uncollectible loans, a drop of 47 percent from last year guaranteed online personal loans. But marketing and operating expenses rose 15 percent, offsetting some of that benefit.

Capital One shares added 74 cents, or 2 percent, in Thursday trading and were unchanged aftermarket.

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World stock markets rose Wednesday, with investors emboldened by reports that Germany and France were moving closer toward resolving Europe’s debt crisis through a massive expansion of the region’s bailout fund.

Oil prices hovered above $88 per barrel, while the dollar was lower against the euro but edged up against the yen.

European shares rose in early trading. Britain’s FTSE 200 was 0.4 percent higher at 5,707.19. Germany’s DAX gained 0.8 percent to 5,925.43 and France’s CAC-40 added 0.7 percent to 3,162.89.

But Wall Street, coming off a strong rally the previous day, appeared to be headed lower. Dow Jones industrial futures fell 0.5 percent to 11,465 and broader S&P 500 futures shed 0.7 percent to 1,215.10.

Asian shares were mostly higher after taking a beating on Monday. Japan’s Nikkei 225 index rose 0.4 percent to 8,772.54 and Hong Kong’s Hang Seng added 1.3 percent to 18,309.22. South Korea’s Kospi gained 0.9 percent to 1,855.92.

Benchmarks in Australia, India and Indonesia were higher. Those in Singapore, Taiwan, Malaysia and Thailand fell.

The Guardian newspaper reported that France and Germany have agreed to expand the rescue fund for nations using the euro common currency to euros 2 trillion ($2.74 trillion). The paper cited unnamed European diplomats and said European officials are expected to take up the expansion along with a package of other measures at a meeting this weekend.

Wall Street rose sharply Tuesday on the news. The Dow Jones industrial average rose 1.6 percent to close at 11,577.05. The S&P 500 index rose 2 percent to 1,225.38. The Nasdaq composite rose 1.6 percent to 2,657.43.

Gains in Asia were muted, however, since investors may want to see more consistent gains before wading deeply back into the market, analysts said.

“Following recent volatility, it is unlikely that we will see quite as big a rally locally as our U.S. peers today. Particularly at the retail end of the market, investors will probably wait to see successive gains before rushing back into the market,” Stan Shamu of IG Markets in Melbourne said in a research note.

Mainland China’s Shanghai Composite Index fell 0.3 percent to 2,377 payday loan lenders.51. That comes on top of a 2.3 percent loss Tuesday, when data showed China’s economic growth eased last quarter to 9.1 percent. The smaller Shenzhen Composite Index lost 0.6 percent to 1,004.20.

Hong Kong-based analyst Francis Lun cautioned investors not to overreact to data about China’s economy, which is still enjoying steady growth.

“Don’t worry about China,” Lun said. “I think even a 9.1 percent growth is not the end of the world. I think people just overplayed the slowdown.” The overwhelming concern for markets is Europe and fears of a messy debt default by Greece, he said.

The Greek government is widely expected to go through some kind of default or restructuring of its debt. If that process becomes disorderly, European banks could suffer big losses on Greek government bonds and that could spread overseas, jolting global credit markets. That could escalate into another financial crisis similar to the one that occurred in 2008 after the collapse of Lehman Brothers.

Hopes for a solution to the European crisis sent banking shares higher. National Australia Bank Ltd. rose 1.5 percent, Japan’s Mitsubishi UFJ Financial Group rose 0.9 percent, and Hong Kong-listed Bank of China Ltd. gained 2.3 percent.

Japan’s export shares slid amid a stubbornly strong yen, which makes domestically manufactured products more expensive overseas. Sony Corp. was down 1.2 percent and Toshiba Corp. lost 2.4 percent.

Camera and precision instruments maker Olympus Corp. fell 2 percent, continuing its retreat in the aftermath of the firing of CEO Michael Woodford, whom media reports said was dismissed after challenging Olympus executives about questionable corporate governance practices and several acquisitions.

Benchmark crude for November delivery was up 7 cents at $88.41 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.96 to settle at $88.34 in New York on Tuesday.

In currencies, the euro rose to $1.3806 from $1.3747 late Tuesday in New York. The dollar rose to 76.78 yen from 76.76 yen.

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U.S. stock futures are little changed ahead of a full week of corporate earnings reports.

Citigroup Inc., Wells Fargo & Co., and IBM are among U.S. companies reporting third-quarter earnings results Monday.

Investors will also receive a report from the Federal Reserve on production from factories, mines and utilities in September. Economists expect that industrial production rose slightly last month.

The stock market is coming off of its best week in more than two years no fax needed payday loans. The S&P 500 rose 6 percent last week, its best performance since July 2009.

Two hours before the opening bell, Dow futures were unchanged at 11,565. S&P 500 futures were up less than a point to 1,220. Nasdaq 100 futures were down 1, or 0.1 percent, to 2,366. European shares are mixed.

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ST. CHARLES