US stocks, dollar gain after strong report about private jobs
NEW YORK (Reuters) – US stocks rose on Wednesday, with the Nasdaq hitting a fresh all-time high on strong US private-sector jobs data, which also lifted the dollar as it backed forecasts for at least two more interest-rate hikes by the Federal Reserve this year.
US companies added 263,000 workers in March, the most since December 2014, pointing to further tightening of the labor market, payrolls processor ADP said.
The report easily beat the median forecast of a 187,000 increase by economists surveyed by Reuters.
The US dollar gained against the Japanese yen for the first time in four days after the report.
“The ADP survey is clearly another indication that, despite the apparent slowdown in GDP growth in the first quarter, labor-market conditions have remained unusually strong,” Capital Economics economist Andrew Hunter said.
The dollar index rose 0.12%, with the euro down 0.17% to $1.0654. The yen weakened 0.44% versus the greenback to 111.23 per dollar.
The jobs data brought investors back into the market even as concerns about US President Donald Trump’s ability to deliver on his pro-growth policy plans persist after a recent legislative setback.
On Wall Street in afternoon trading, the Dow Jones Industrial Average was on track for its best day since March 1 in a broad rally.
The Dow rose 141.19 points, or 0.68%, to 20,830.43, the S&P 500 gained 13.06 points, or 0.55%, to 2,373.22, and the Nasdaq Composite added 26.87 points, or 0.46%, at 5,925.48.
European stocks rose on the ADP report but pared gains to close flat. The pan-European FTSEurofirst 300 index fell 0.01% to close at a provisional 1,497.68, while the STOXX Europe 600 Index, a broad mix of companies from 17 regional countries, rose 0.02%.
MSCI’s all-country world index of stocks from 46 countries gained 0.31%.
Oil prices rose on an outage at the largest UK North Sea oil field, but gains were tempered by a surprise increase in US crude inventories to a record high. Prices rose early and then seesawed after the US government reported a weekly rise in crude inventories of 1.6 million barrels.
Analysts had expected a decrease of 435,000 barrels, and the buildup reported by the Energy Information Administration came as a double surprise after an industry group had reported a draw.
US crude rose 0.57% to $51.32 per barrel, and Brent was last at $54.53, up 0.66% on the day.
The ADP data came ahead of the Labor Department’s monthly nonfarm payrolls report on Friday, which includes both public- and private-sector employment. Economists polled by Reuters expect the report to show US employers added 180,000 jobs in March.
A strong US jobs report on Friday would “make an even better case for the Fed to continue its tightening and maybe increase the probability that they could move three more times this year,” said David Coard, head of fixed-income sales and trading at Williams Capital Group in New York.