By Medha Singh
(Reuters) - U.S. stocks rose on Wednesday as expectations of an interest rate cut by the Federal Reserve were boosted by weak private sector jobs growth and on hopes that tariffs on Mexican goods could be avoided.
Comments from Fed Chairman Jerome Powell and other U.S. central bank officials this week have helped equity markets as they warned the trade war may force them to respond.
The ADP National Employment Report showed that U.S. private employers hired at the slowest pace in more than nine years in May. Analysts blamed the weakness on heightening global trade tensions.
The data, which comes ahead of the more comprehensive nonfarm payrolls from the Labor Department on Friday, increased the likelihood that the U.S. central bank would cut interest rates by at least 75 basis points through December.
"The Fed is clearly leaning in the direction that it will cut rates if it sees anymore slowing in the economy and there is that hope that we can avoid putting tariffs on Mexico so that is a positive," said Art Hogan, chief market strategist at National Securities in New York.
Republican Senator Chuck Grassley predicted that the United States and Mexico would be able to strike a deal to avert tariffs President Donald Trump has threatened to impose on Mexican imports.
Fears of a global slowdown resurfaced last month following a flare up in trade tensions between the United States and China, putting the tech-heavy Nasdaq in correction territory and pulling the benchmark S&P 500 index about 5% away from its record high hit on May 1.
At 12:51 p.m. ET the Dow Jones Industrial Average was up 147.54 points, or 0.58%, at 25,479.72, the S&P 500 was up 14.97 points, or 0.53%, at 2,818.24. The Nasdaq Composite was up 24.64 points, or 0.33%, at 7,551.76.
The energy sector slipped 1.07% drop, the most among the three S&P sectors trading lower, as crude prices fell sharply.
Meanwhile utilities, real estate and consumer staples, considered defensive plays, were the top gainers.
The technology sector provided the biggest boost to the market, helped by Apple Inc and Microsoft Corp. Salesforce.com Inc advanced 3.4% after the cloud-based service provider forecast full-year results above expectations.
Campbell Soup Co jumped nearly 9.3%, the most on the S&P index, after the soup-maker raised its full-year profit forecast.
Declining issues outnumbered advancers for a 1.02-to-1 ratio on the NYSE and for a 1.33-to-1 ratio on the Nasdaq.
The S&P index recorded 55 new 52-week highs and seven new lows, while the Nasdaq recorded 61 new highs and 77 new lows.
(Reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila and Anil D'Silva)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Jun 06, 2019 00:07:49 IST