U.S. Stocks Off To A Strong Start After Bullish Economic Data
NEW YORK (MarketWatch) -- U.S. stocks on Wednesday leapt ahead for the first time this month after early data cast a more positive light on the U.S. economy before Friday's payrolls report, while leaving intact hopes of another interest-rate cut next week.
which improved sentiment ahead of Friday's payrolls report, while upward revisions to the productivity report were also friendly as well," said analysts at Action Economics.
The Dow Jones Industrial Average rose 129 points to 13,391, with 27 of its 30 components ahead.
The S&P 500 gained 26.75 points to 2,089, while the Nasdaq Composite rose 15.1 points to 1,478.60.
Ahead of the opening bell, major stock index futures had extended early gains after ADP reported hiring in the private sector expanded at a faster pace in November, gaining 189,000 after a revised 119,000 jump in October. The latest monthly hike is well above forecasts calling for a rise of 60,000.
In a separate report, the Labor Department said productivity in the nonfarm business sector rose at a 6.3% annual rate in the third quarter, an upward revision from the 4.9% tally a month ago.
And, in a signal of milder inflationary pressure than previously thought, the government revised unit labor costs down, showing a 2% annual decline compared to a 0.2% drop estimated a month ago. .
On the New York Mercantile Exchange, crude-oil futures rose to near $90 a barrel after the Organization of Petroleum Exporting Countries opted to leave production as is. Crude for January delivery recently gained $1.10 to $89.42. .
Fed factor
Data slated for release at 10 a.m. Eastern includes pending homes sales, factory orders and the Institute for Supply Management's non-manufacturing sentiment poll for November, with the data all expected to be scrutinized by the Federal Reserve, which meets next Tuesday.
On Wednesday, the Reserve Bank of Australia didn't cut interest rates, as the Bank of Canada did Tuesday, but it did sound a more dovish tone. "Sentiment in global credit markets has deteriorated recently after an earlier improvement and prospects for growth in the major economies appear to be weakening," the Aussie central bank said.
The Bank of England and the European Central Bank will make rate decisions on Thursday, with the U.K. central bank under increasing pressure to cut rates after data released showed measures of house prices, consumer confidence and services sector falling.
The British pound dropped sharply against most rivals, while the U.S. dollar was stronger against the euro and the Japanese yen as well.
On Tuesday, U.S. stocks posted a second straight session of losses as a spate of downgrades for financials fueled concerns about the credit-market crisis and updates from Nokia Corp. and Merck & Co. Inc. disappointed investors.
By Kate Gibson