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GLOBAL MARKETS-Stocks, dollar gain on strong private jobs report
April 5, 2017 / 4:39 PM / 8 months ago

GLOBAL MARKETS-Stocks, dollar gain on strong private jobs report

* ADP data renews Wall St rally, Nasdaq at new high

* Dollar, yields advance after robust jobs data

* Oil hits one-month high near $55 a barrel

By Herbert Lash

NEW YORK, April 5 (Reuters) - U.S. stocks rose on Wednesday, with the Nasdaq hitting a fresh all-time high on strong U.S. 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.

U.S. 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, among economists surveyed by Reuters, of a 187,000 increase.

The U.S. dollar gained against the Japanese yen for the first time in four days after the report, which supported forecasts for at least two more rate hikes by the Fed this year.

“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,” said Capital Economics economist Andrew Hunter.

The dollar index rose 0.12 percent, with the euro down 0.17 percent to $1.0654. The yen weakened 0.44 percent versus the greenback to 111.23 per dollar.

The jobs data brought investors back into the market even as concerns about U.S. President Donald Trump’s ability to deliver on his pro-growth policy plans persist after a recent legislative setback.

On Wall Street, 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 percent, to 20,830.43. The S&P 500 gained 13.06 points, or 0.55 percent, to 2,373.22 and the Nasdaq Composite added 26.87 points, or 0.46 percent, 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 percent 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 percent.

MSCI’s all-country world index of stocks from 46 countries gained 0.31 percent.

Oil prices rose on an outage at the largest UK North Sea oil field, but gains were tempered by a surprise increase in U.S. crude inventories to a record high.

Prices rose early and then seesawed after the U.S. government reported a weekly rise in crude inventories of 1.6 million barrels.

Analysts had expected a decrease of 435,000 barrels, and the build reported by the Energy Information Administration came as a double surprise after an industry group had reported a draw.

U.S. crude rose 0.57 percent to $51.32 per barrel and Brent was last at $54.53, up 0.66 percent on the day.

The ADP data came ahead of the Labor Department’s monthly non-farm payrolls report on Friday, which includes both public and private-sector employment. Economists polled by Reuters expect the report to show U.S. employers added 180,000 jobs in March.

A strong U.S. 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.

Minutes of the U.S. central bank’s March meeting are due to be released at 2 p.m. EDT (1800 GMT).

Benchmark 10-year Treasury yields hit a session high of 2.382 percent in the wake of the ADP data, from 2.350 percent late on Tuesday and a more than five-week low of 2.314 percent touched earlier that day.

Reporting by Herbert Lash; Editing by Richard Chang

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