US stocks rise on jobs’ data, virus treatment talks
Nearly all the increase was in the services sector, but there was a relatively healthy gain in manufacturing as well.
American companies hired at a stunning pace in January, adding the most jobs in five years, according to data Wednesday from payrolls firm ADP.
Private companies added 291,000 new hires last month — surpassing the consensus forecast in spectacular fashion — to post the biggest gain since December 2014, according to ADP’s monthly report.
Nearly all the increase was in the services sector, but there was a relatively healthy gain in manufacturing as well.
While the report is watched for signals on the critical government employment data due out Friday, economists warned that they expected the figure to be exaggerated as the data is frequently revised. The leisure, hospitality and construction industries “in particular experienced an outsized increase in jobs,” he said in the report.
The construction sector has had two strong months, adding 47,000 jobs in January, while manufacturing gained 10,000 jobs, reversing the decline of the same amount in December. Health and education also have continued to hire at a solid pace.
“Investors are looking at economic data which is better than expected and earnings season which have been good,” said Art Hogan, chief market strategist at National Securities in New York.
“Markets are trying to price in a more realistic view of the economic damage which will follow this disease.” Earlier in the day, stock index futures got a boost after a report that a Zhejiang University team had found some drugs that could inhibit the coronavirus in vitro cell experiments.
Separately, researchers in the UK told Sky News that they have made a “significant breakthrough” in finding a vaccine.
Reuters could not independently verify the reports, but several traders cited them for the sharp moves in global stock markets.
The World Health Organization played down the reports, saying “there are no known effective therapeutics against this 2019-nCoV (virus)”.
Wall Street has staged a stellar comeback in the past two sessions from last week’s steep declines after China pumped in billions of dollars into the financial system this week to limit the economic impact of the virus outbreak.
The country’s central bank is likely to lower its key rate on Feb. 20, sources told Reuters, as the death toll from the epidemic climbs to nearly 500.
At 9:50am, the Dow Jones Industrial Average was up 321.02 points, or 1.11%, at 29,128.65, the S&P 500 was up 29.45 points, or 0.89%, at 3,327.04. The Nasdaq Composite was up 62.67 points, or 0.66%, at 9,530.65.
Ten of the 11 major S&P sectors were higher, led by a 2.5% gain in energy stocks, which tracked higher oil prices. The US earnings season has reached the halfway mark and corporate America has largely beaten Wall Street expectations.
Coty Inc jumped 17.3% as the cosmetics maker beat estimates for quarterly profit and revenue.
Ford Motor Co tumbled 9.4% after the No. 2 US automaker delivered a weaker-than-expected 2020 forecast.
Advancing issues outnumbered decliners by a 3.49-to-1 ratio on the NYSE and a 3.03-to-1 ratio on the Nasdaq.
The S&P index recorded 52 new 52-week highs and no new lows, while the Nasdaq recorded 97 new highs and nine new lows.
Meanwhile, oil prices jumped by more than 3% on Wednesday after media reports that scientists had developed a drug against the fast-spreading coronavirus that continues to weigh heavily on global economic activity. Lending further support to oil was news that the Organization of the Petroleum Exporting Countries (OPEC) and its producer allies are considering further output cuts to counter a potential squeeze on global oil demand.
Brent crude oil futures were up $2.14, or 3.8%, at $56.06 a barrel by 1433 GMT. US West Texas Intermediate (WTI) crude gained $1.88, or 3.7%, to $51.50.
With the spread of the virus continuing, thousands of passengers and crew on two cruise ships in Asian waters were placed in quarantine on Wednesday as airlines, car manufacturers and other global companies counted the cost of the outbreak.
Separately, the US trade deficit fell for the first time in six years in 2019 as the White House’s trade war with China curbed the import bill, keeping the economy on a moderate growth path despite a slowdown in consumer spending and weak business investment.
Agencies
