U.S. stocks advance amid earnings results, private payrolls data

 A trader works on the floor of the New York Stock Exchange. PHOTO: AFP
A trader works on the floor of the New York Stock Exchange. PHOTO: AFP

NEW YORK (BLOOMBERG) - U.S. stocks advanced to extend their three-month highs, amid corporate earnings reports and data showing steady progress in the labour market.

The Standard & Poor's 500 Index rose 0.2 per cent to 2,114.06 at 9:32 a.m. in New York (9.32 pm Singapore time), after adding 1.5 per cent in the first two trading days of the month.

"Seasonally, it's a strong time of year," said Patrick Spencer, equities vice chairman at Robert W. Baird & Co. in London. "In the short term, markets are being moved by pull of earnings, but in the longer term investors are looking at what the Fed will do with interest rates."

Stocks extended a rally on Wednesday, with the S&P 500 hitting its highest since July and rising to within 1 percent of its record set in May. Energy and commodity producers, two of the biggest sufferers in the third-quarter selloff, paced the gains.

The benchmark gauge has rallied 13 per cent since hitting a year- to-date low in August after China's surprise devaluation of the yuan sent markets into turmoil.

More than 100 companies on the S&P 500 report earnings this week, with Facebook Inc., MetLife Inc., Transocean Ltd. and Qualcomm Inc. among those posting today. Of the companies that have reported so far this season, about 74 per cent have beaten profit estimates, while only 44 per cent have topped sales forecasts.

Analysts estimate profits dropped 3.9 per cent in the third quarter, up from predictions for a 6.1 per cent decline a week ago.

Investors will also be listening for hints on the Federal Reserve's intentions toward interest rates. Fed Chair Janet Yellen, New York Fed's William Dudley and Vice Chair Stanley Fischer are all scheduled to deliver remarks today. Traders now price in a 54 per cent chance the central bank will increase rates at its December meeting, up from 34 per cent last week before its October gathering.

As policy makers look for more improvement in the labor market, a report today showed companies in the U.S. added 182,000 workers to payrolls in October after a 190,000 increase a month earlier, according to the ADP Research Institute. Economists surveyed by Bloomberg called for a 180,000 advance. Separate data showed the U.S. trade gap shrank in September to a seven-month low, reflecting declining purchases of foreign fuel.

The ADP jobs report is a precursor to Friday's government data, in which economists forecast the economy added 182,000 jobs, with an estimated 168,000 added to private payrolls. The unemployment rate is expected to slip to 5 percent from 5.1 percent in September.