Investing.com – Wall Street traded higher on Wednesday after the ADP employment report gave a strong positive reading on the labor market ahead of Friday’s official government data release and while market players looked ahead to the publication of the minutes from the last Federal Reserve (Fed) meeting later in the session.
At 11:08AM ET (15:08GMT), the Dow Jones gained 146 points, or 0.70%, the S&P 500 rose 13 points, or 0.53%, while the Nasdaq Composite traded up 29 points, or 0.50%.
The ADP private sector nonfarm payrolls report showed that the U.S. economy created 263,000 jobs in March, blowing past expectations for 187,000 new positions and underlining the strength of the labor market.
While not viewed as a reliable guide for the government jobs report due on Friday, April 7, it does give guidance on private-sector hiring and sets the stage for a positive surprise.
Outgoing Fed governor Daniel Tarullo told CNBC on Wednesday that he considered the ADP report to be even further confirmation of a "solid trend" of strength in employment.
Tarullo also agreed that it was time for the Fed to consider how to move forward with balance sheet normalization although the question would be how to pair that with interest rate increases.
At 2:00PM ET (18:00GMT) Wednesday the Fed will release minutes of its most recent policy meeting on Wednesday. The U.S. central bank raised its benchmark interest rate by 25 basis points following its meeting on March 15 and stuck to its projection for two more hikes this year.
Market players will search through the minutes to see if there are further indications on policymakers’ level of commitment to policy tightening this year and next.
However, a string of remarks from several Fed officials in the last two weeks and the positive ADP jobs report had already increased chances for the next hike to be in June. According to Investing.com's Fed Rate Monitor Tool, Fed fund futures priced in the odds of a move at that meeting at around 62%, compared to just 45% last week.
In negative economic news released on Wednesday, the Institute of Supply Management (ISM) said its non-manufacturing purchasing manager's index (PMI) fell to 55.2 in March. Although it was the 87th consecutive month of grow, the deceleration was more than the 57.0 forecast.
In M&A news, Panera Bread (NASDAQ:PNRA) saw shares jump almost 14% after JAB Holdings said it would buy the U.S. bakery chain in an all-cash deal valued at about $7.5 billion.
In earnings, Monsanto (NYSE:MON) gained more than 1% after the seed company reported better-than-expected quarterly profit thanks to strong demand.
On the downside, Walgreens Boots Alliance (NASDAQ:WBA) fell around 1% as the pharmaceutical retailer reported a 2.4% in quarterly sales.
Bed Bath & Beyond (NASDAQ:BBBY) will release quarterly earnings Wednesday after the close.
Meanwhile, oil prices remained higher on Wednesday though gains were sharply pared after U.S. crude oil inventories showed a surprise build of 1.566 million barrels in the week ended March 31.
U.S. crude futures gained 0.16% to $51.11 by 11:10AM ET (15:10GMT), while Brent oil traded up 0.31% to $54.34.