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NEW YORK (AP) — A report that small businesses are hiring more workers than economists expected sent stocks sharply higher Wednesday.
The Dow Jones industrial average gained 200 points in early trading. All 30 stocks in the index rose. 3M Co. and United Technologies Corp. each rose more than 3 percent.
ADP Employer Services said employment at private companies jumped by 93,000 in November as small businesses added the largest amount of workers in three years. Economists had expected private companies to add 70,000 jobs. Private sector employment grew by 83,000 in October, ADP said.
"The U.S. economy is all about jobs and anything that leads folks to believe that there's a better job market will be good for equities," said Paul Zemsky, the head of asset allocation at ING Investment Management.
Stock rose overseas before the U.S. market opened. Investors were cheered by a reports that indicated the Chinese economy is growing. A Chinese state index of manufacturing activity rose to 55.2 in November from 54.7 in October. Any number above 50 indicates economic expansion. Monthly readings have stayed above that number for 21 straight months. A competing Chinese survey by HSBC rose to an eight-month high.
Fears that the European financial crisis would spread eased after European Central Bank President Jean-Claude Trichet suggested that the bank could buy bonds issued by struggling countries within the European Union. That, along with a better-than-expected bond auction by Portugal, helped send the euro and European stock indexes sharply higher. Investors worry that the country could be the next member of the European Union to need help from its neighbors.
The euro rose 0.9 percent after the auction. The Euro Stoxx 50 index, which tracks blue chip companies in countries that use the euro, rose 1.6 percent.
Hong Kong's Hang Seng rose 1.1 percent. China's benchmark Shanghai Composite Index rose 0.1 percent. Stocks have fallen in Asia since early November after China raised a key interest rate to combat inflation.
Several economic reports being released Wednesday may give a better indication of where the U.S. economy is headed.
Before the U.S. market opened, the Labor Department reported that productivity grew at an annual rate of 2.3 percent during the third quarter, better than the initial estimate a month ago.
November figures for auto sales and manufacturing activity will also come out by the end of the day. The Federal Reserve will also put out its report on regional economic activity.
The Dow Jones industiral average rose 200.01, or 1.8 percent, to 11,206.13 in early trading. The S&P 500 rose 19.97, or 1.7 percent, to 1,200.52. The Nasdaq composite rose 46.18, or 1.9 percent, to 2,544.29.