(Reuters) - The S&P and the Dow were higher on Wednesday, as energy stocks gained from a jump in oil prices and strong private jobs data pointed to the strength in the labor market, while Apple’s 1 percent drop limited gains on the Nasdaq.
The recent rally on Wall Street has been supported by strong third-quarter results from technology and consumer companies amid concerns over stretched valuations.
“Earnings drive the markets, and they continue to be really good,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
Third-quarter earnings have been largely positive, with 73 percent of the S&P 500 companies that have reported topping profit expectations, according to Thomson Reuters data. That is above the 72 percent profit-beat rate in the past four quarters.
On Wednesday, cosmetics maker Estee Lauder (EL.N), US Steel (X.N) and Garmin (GRMN.O) all reported strong results. Estee Lauder rose nearly 10 percent, US Steel 11 percent and Garmin 5.51 percent.
Investors are also tracking the Federal Reserve’s two-day meeting that concludes later on Wednesday. The central bank is expected to keep interest rates unchanged as speculation swirls on who will be its next leader, but will likely point to a firming economy as it edges closer to a possible rate rise next month.
“I don’t believe anybody in the world thinks the Fed is going to do anything with the interest rates now. What they may say about December or next year is what the market is watching for,” said Kinahan.
The White House has said President Donald Trump will announce his Fed pick on Thursday. Trump is expected to choose Fed Governor Jerome Powell, who is seen as more stock-market friendly, sources have told Reuters.
At 10:52 a.m. ET, the Dow Jones Industrial Average .DJI was up 120.91 points, or 0.52 percent, at 23,498.15, the S&P 500 .SPX was up 10.24 points, or 0.40 percent, at 2,585.5 and the Nasdaq Composite .IXIC was up 8.55 points, or 0.13 percent, at 6,736.22.
U.S. private employers hired 235,000 workers in October, the most since March and exceeding a median forecast of 200,000 among economists polled by Reuters, the ADP National Employment Report showed.
The focus now shifts to Friday’s more comprehensive non-farm payrolls report for October. The report will include both public and private-sector employment.
Eight of the 11 major S&P indexes were higher, led by gains in the energy .SPNY sector.
Oil hit its highest since mid-2015 on data that showed OPEC significantly improved compliance with its pledged supply cuts and Russia is also widely expected to keep to the deal. [O/R]
Exxon (XOM.N) and Chevron (CVX.N) gained 0.50 percent.
Advancing issues outnumbered decliners on the NYSE by 1,767 to 960. On the Nasdaq, 1,421 issues rose and 1,286 fell.
Reporting by Sruthi Shankar; Editing by Sriraj Kalluvila
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