US stocks rose yesterday, 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 labour market, payrolls processor ADP said.
The report easily beat the median forecast, among economists surveyed by Reuters, of a 187,000 increase.
The US 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 CapitalEconomics economist Andrew Hunter.
The dollar index rose 0.12 per cent, with the euro down 0.17 per cent to $1.0654. The yen weakened 0.44 per cent 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, 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 per cent, to 20,830.43. The S&P 500 gained 13.06 points, or 0.55 per cent, to 2,373.22 and the Nasdaq Composite added 26.87 points, or 0.46 per cent, 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 per cent 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 per cent.
MSCI’s all-country world index of stocks from 46 countries gained 0.31 per cent.
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 build reported by the Energy Information Administration came as a double surprise after an industry group had reported a draw. US crude rose 0.57 per cent to $51.32 per barrel and Brent was last at $54.53, up 0.66 per cent on the day.
The ADP data came ahead of the Labour Department’s monthly non-farm payrolls report tomorrow, which includes public and private-sector employment. Economists polled by Reuters expect the report to show US employers added 180,000 jobs in March.