By Carla Mozee

Mexican equities snapped a two-session losing streak on Wednesday, with home builders finding support from comments by a major ratings agency about stabilization in the sector.

Equities in the region largely held on to gains after minutes released from the U.S. Federal Reserve's most recent meeting showed policy makers are more confident that the downturn in the economy is nearing an end, but remain unsure about the strength of recovery.

Investors also appeared to have set aside a report that the U.S. private sector shed 298,000 jobs in August, as well as a separate government report that factory orders rose by a less-than-expected 1.3% in July.

Mexico's IPC equity index rose 0.7% to 27,953.34, as investors hunted for bargains following two sessions of declines that had resulted in a 3% fall in the benchmark.

Mining stocks led advancers, with shares of Grupo Mexico up 4.5%. They added to their 14% surge from the previous session after a judge's ruling puts the company closer to regaining control of Asarco LLC, an Arizona mining company that it had lost control of in 2005 in the wake of Asarco's bankruptcy filing.

Miner Industrias Penoles rose 5.5%, and Compania Minera Autlan gained 0.8%.

Shares of home builder Desarrolladora Homex (HXM) advanced 3.4% and Urbi Desarrollos rose 1% after Moody's Investors Service said it has a stable outlook on the Mexican housing sector as it's "well positioned to weather the recession over the intermediate term."

Mexican housing prices, unlike in the U.S., have remained stable and continue to trend with inflation, said Moody's, while demand for housing, particularly in the low-income category, continues to be robust.

"A full recovery will, however, depend on the future health of the Mexican economy and the government's continued support of the housing sector," wrote Griselda Bisonó, an analyst at Moody's, in a report.

Shares of home builder Consorcio Ara, however, slipped 0.3%.

Following the release of the Federal Reserve minutes, Brazil's Bovespa had been on track to post a modest increase but it ended with a loss of 0.8% at 55,385.72. It was the benchmark's fifth decline in a row.

But the overall loss on the index was capped by a 1.7% rise in shares of market heavyweight Petrobras (PBR) after BP (BP) said it made a "giant" discovery of oil in the Gulf of Mexico. Petrobras said in a statement that its Petrobras America subsidiary holds a 20% stake in the project. ConocoPhillips (COP) holds an 18% stake and BP has a 62% stake.

Shares of JBS rose 1.7% ahead of a Wall Street Journal report late Wednesday that the meatpacker plans to purchase U.S.-based poultry provider Pilgrim's Pride Corp. (PPC) in a deal worth more than $2 billion. Pilgrim's Pride is reorganizing under Chapter 11 bankruptcy law. The deal is reportedly in the final stages and could still fall apart. If completed, the deal could be announced as early as next week, according to the Journal.

JBS USA Holdings, a unit of JBS, in late July filed for a $2 billion initial public offering, and is seeking to be listed on the New York Stock Exchange.

Meanwhile, sugar and ethanol producer Cosan was upgraded to overweight from neutral at HSBC Global Research. The broker also raised its price targets on Cosan's U.S.-listed shares (CZZ) to $11 from $4.50, and Cosan's shares traded in Sao Paulo, saying in part that global sugar fundamentals should remain strong in fiscal 2010 ending in March, and in fiscal year 2011.

Cosan's locally traded shares shed 0.8%.

Market players had also awaited a decision by the Brazilian central bank on interest rates, and late Wednesday policy makers met market expectations by holding the Selic rate unchanged at 8.75%.

Chile's IPSA rose 0.4% to 3,146.63, and Argentina's Merval rose 0.5% to 1,755.22.

On Wall Street, the S&P 500 Index (SPX) fell 0.3% to 994.75, and the Dow Jones Industrial Average (DJI) fell 0.3% at 9,280.67.