12-4-13 11:09 AM EST | Email Article
 

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.

-Victor Reklaitis; 415-439-6400; AskNewswires@dowjones.com

 

* 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

-Victor Reklaitis; 415-439-6400; AskNewswires@dowjones.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

12-04-13 1109ET

Copyright (c) 2013 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
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