Wall St. bounces back as ECB seen acting, data supports

By Rodrigo Campos

NEW YORK (Reuters) – U.S. stocks bounced back on Wednesday after five sessions of losses, following strong private sector jobs data and as deflation concerns in the euro zone were seen pushing the bloc’s central bank into action.

European shares gained more than 1 percent on bets the first negative inflation in the euro zone since 2009 would trigger a long-awaited move from the European Central Bank to basically begin to print money.

“Speculation that is finally going to cause the ECB to move forward with some aggressive quantitative easing explained the rally in Europe, and U.S. futures rebounded on that as well,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois, regarding the early bid on U.S. equities.

Further support for stocks came after data showed U.S. private employers added 241,000 jobs last month, more than the 226,000 expected, while the November number was revised to 227,000 from the previously reported 208,000.

The ADP report “certainly gives people some encouragement going into the official jobs number on Friday,” said Jankovskis.

Non-farm payrolls estimates for December are at 240,000 according to a Reuters survey.

The Dow Jones industrial average (.DJI) rose 133.83 points, or 0.77 percent, to 17,505.47, the S&P 500 (.SPX) gained 16.31 points, or 0.81 percent, to 2,018.92 and the Nasdaq Composite (.IXIC) added 36.25 points, or 0.79 percent, to 4,628.99.

Minutes from the most recent meeting of the U.S. Federal Reserve policy-setting committee are due at 2:00 p.m. ET and traders will scan them for clues on the timing of an interest rate hike. The Fed said it would take a “patient” approach in deciding when to lift borrowing costs.

The S&P 500 (.SPX) had fallen for a fifth straight session on Tuesday, for its longest losing streak in 13 months, as oil prices tumbled further and data showed slower growth in the U.S. services sector in December.

Brent (LCOc1) fell as much as 2.8 percent on Wednesday but was last up 0.3 percent on the day. U.S. crude (CLc1), down 2.3 percent at its session low, was recently up 1.8 percent at $ 48.78 per barrel.

J.C. Penney (JCP.N) shares surged 17.2 percent to $ 7.69 after the department store operator said same-store sales rose 3.7 percent in November and December.

Micron Technology (MU.O) fell 2.4 percent to $ 32.09 after the memory chipmaker’s quarterly revenue forecast on Tuesday missed Wall Street’s expectations.

Monsanto (MON.N) reported a 34 percent drop in quarterly profit, but the decline was less steep than analysts expected and shares gained 1.7 percent to $ 117.78.

(Additional reporting by Chuck Mikolajczak; Editing by Nick Zieminski)