By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks advanced on Wednesday,
putting the S&P 500 and Dow industrials on pace to snap a
three-day losing streak, with some traders attributing the move to
news of progress toward a U.S. budget deal.
Stocks erased losses that came after a stronger-than-anticipated
private-sector jobs report, which appeared to reinforce worries
that later this month the Federal Reserve could start to taper its
bond-buying program that has supported equities.
Bloomberg News reported Wednesday that U.S. budget negotiators
are near a deal in which Democrats would accept fresh revenue from
user fees and Republicans would agree to more federal spending,
steps that could avoid another government shutdown next year.
"That's probably one of the reasons why we've reversed," said
Peter Cardillo, chief market economist at Rockwell Global Capital.
But he also warned stocks could drop back into negative territory
if the Fed's Beige Book, a summary of economic conditions that's
due at 2 p.m. Eastern time, turns out to be better than expected
and brings tapering concerns back to the forefront.
The S&P 500 (SPX) rose 4 points, or 0.2%, to 1,799, trading
near the milestone level of 1,800. The Dow Jones Industrial
Average(DJI) gained 38 points, or 0.2%, to 15,953, holding below
its own big round number of 16,000.
The Nasdaq Composite (RIXF) added 13 points, or 0.3%, to 4,050,
staying comfortably above 4,000 as the tech-heavy index worked to
snap a two-day losing streak.
On Tuesday, stocks lost ground on uncertainty over when the Fed
will begin to pare its bond-buying program and on jitters about
whether the market rally is overextended.
* Today's market-moving news: The emerging budget deal gives
negotiators a framework to reach an agreement on government
spending either by a budget panel's Dec. 13 deadline or before
federal spending expires on Jan. 15. Meanwhile, private-sector
hiring in November was the hottest in a year, as 215,000 jobs were
added, according to a report from Automatic Data Processing
released Wednesday. A new-home-sales report beat forecasts, while a
services gauge missed expectations.
* Today's movers & shakers: CF Industries Holdings Inc.
shares rallied nearly 10% after RBC Capital Markets initiated
coverage of the stock with a sector perform rating. Express Inc.
dropped 21% after the clothing retailer cut its full-year outlook.
Hewlett-Packard Co. rose 4% after a positive Morgan Stanley report.
See: Movers & Shakers column.
* The buzz: After a historic bull-market run, a notable group of
analysts is warning that all of this could be a bubble that is
about to pop, writes John Nyaradi, a contributor to MarketWatch's
Trading Deck. On Tuesday, San Francisco Fed President John Williams
told Reuters in an interview that the Fed should only taper when it
is "completely confident" the economy is progressing on the right
track.
* Other markets: Japan's Nikkei 225 dropped 2.2% as the yen
rebounded against the dollar. European stocks traded lower.
* Other must-read stories on MarketWatch:Asian stocks drop as
yen rebounds hurts Japan Private-sector job gains hottest in a
year: ADPLook twice at most hated market in the world: Russia
Other must-read stories on MarketWatch:
Asian stocks drop as yen rebounds hurts Japan
Private-sector job gains hottest in a year: ADP
Look twice at most hated market in the world: Russia
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