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Market's attention turns to Fed for clues on economy

Two things to watch Wednesday

Investors will be sifting through a batch of data and the Fed's beige book on the economy Wednesday for any indications of whether the economy could be growing stronger than forecast.

There is the ADP report on private payrolls, expected to show slightly more than 220,000 payrolls, and the ISM nonmanufacturing survey, which includes an update on hiring in the services sector. Productivity and costs, for third quarter, are also reported. But the big story might be in the beige book, released at 2 p.m.

"Unless ADP is a huge outlier in either direction, it should really not drive the market. The beige book has potential especially after you heard the rhetoric from (Fed Vice Chairman Stanley) Fischer and (New York Fed President William) Dudley," said George Goncalves, head of rate strategy at Nomura. "They sounded upbeat. They believe their forecasts, and I'm sure they're getting input from the regions. They must feel confident that there's underlying strength in the economy and the beige book should reflect that."