Wall Street opens higher after strong private jobs data

Wall Street sign outside the New York Stock Exchange in New York, on Feb 28, 2012.
Wall Street sign outside the New York Stock Exchange in New York, on Feb 28, 2012.PHOTO: AFP

NEW YORK (Reuters) - US stocks were higher on Thursday after better-than-expected private sector hiring showed that the labour market continues to strengthen, further boosting chances of a rate hike by the Federal Reserve later this month.

The ADP private sector employment report showed that 253,000 jobs were added in May, well above the 185,000 jobs estimated by economists polled by Reuters.

The report by payrolls processor ADP acts as a precursor to the much-awaited nonfarm payrolls data, due on Friday, that includes hiring in both the public and private sectors.

"I think the Fed has already made up its mind. Unless we have a real weak employment data tomorrow I think it's a go-ahead for the Fed to raise rates in June," said Peter Cardillo, chief market economist at First Standard Financial in New York.

San Francisco Federal Reserve Bank president John Williams said on Wednesday he sees a total of three interest rate increases for this year as his baseline scenario, but views four hikes as also being appropriate if the US economy gets an unexpected boost.

Forecasts from Fed officials suggest that a median of two more hikes are planned before the end of the year.

Traders priced in an 89 per cent chance of a rate hike in the upcoming Fed meeting on June 14, according to Thomson Reuters data.

At 9:52am ET (1352 GMT) the Dow Jones Industrial Average was up 21.5 points, or 0.1 per cent, at 21,030.15, the S&P 500 was up 6.16 points, or 0.25 per cent, at 2,417.96 and the Nasdaq Composite was up 26.51 points, or 0.43 per cent, at 6,225.03.

Seven of the 11 major S&P 500 sectors were higher, with the health and technology sectors leading the gainers.

"We have a multitude of macro news coming out today and that will set the tone for the market's direction ... I think we are looking at another trying session," Cardillo said.

Advancing issues outnumbered decliners on the NYSE by 1,931 to 657. On the Nasdaq, 1,707 issues rose and 624 fell.

The S&P 500 index showed 28 new 52-week highs and 11 new lows, while the Nasdaq recorded 82 new highs and 70 new lows.