Stocks climb after upbeat earnings, economic data; Treasury yields jump

By Caroline Valetkevitch

NEW YORK (Reuters) -Major stock indexes gained on Wednesday as corporate earnings and U.S. private payrolls data were stronger than expected, while Treasury yields surged following the day's economic data.

U.S. private payrolls increased by 42,000 jobs in October, exceeding expectations of a 28,000 gain, according to a Reuters poll of economists. However, some industries such as professional business services shed jobs for a third straight month.

Aside from the private payrolls numbers, data showed U.S. services sector activity picked up in October amid a solid increase in new orders.

A congressional impasse has resulted in what is now the longest-ever U.S. government shutdown, which has forced investors and the data-dependent Federal Reserve to rely on private sector indicators.

An index of semiconductors was up 3% after falling sharply on Tuesday. Shares of Advanced Micro Devices ended 2.5% higher after the company late Tuesday gave an upbeat revenue forecast. Among other earnings reports, drugmaker Amgen reported a profit that beat estimates and its shares gained 7.8%.

"Today is a bit of a relief rally you might say," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"The ADP numbers... suggested that maybe if these numbers align with the official numbers - when they finally do come out - and that perhaps the fear over the jobs market may have been somewhat overstated," he said, referring to the ADP National Employment Report.

Investors were also paying close attention as U.S. Supreme Court justices raised doubts over the legality of U.S. President Donald Trump's sweeping tariffs in a case with implications for the global economy.

The Dow Jones Industrial Average rose 225.76 points, or 0.48%, to 47,311.00, the S&P 500 rose 24.74 points, or 0.37%, to 6,796.29 and the Nasdaq Composite rose 151.16 points, or 0.65%, to 23,499.80.

Analysts now see aggregated S&P 500 earnings growth of 16.2% year-on-year for the July-September period, more than double the growth expectations at the beginning of the quarter, according to LSEG.

MSCI's gauge of stocks across the globe rose 1.07 points, or 0.11%, to 997.89.

The pan-European STOXX 600 index rose 0.23%.

Enthusiasm for generative artificial intelligence has swept across stock markets worldwide this year, drawing comparisons to the dotcom bubble.

U.S. Treasury yields rose after the data surprises showed continued economic resilience.

The Treasury Department on Wednesday said it expected to keep its nominal coupon and floating rate note auction sizes steady for at least the next several quarters, but was beginning to consider future increases.

Benchmark 10-year yields rose by nearly seven basis points to 4.159%.

The dollar was little changed against major currencies. The dollar has strengthened against the euro since last week when the Fed cut interest rates by 25 basis points and Fed Chair Jerome Powell said a December cut was not a foregone conclusion.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.01% to 100.16.

Sterling was about flat on the day versus the dollar. The Bank of England meets on Thursday, and with market pricing showing a roughly one-in-three chance of a 25-basis point rate cut, whatever the BoE decides could cause a knee-jerk reaction in the pound.

Leading cryptocurrency bitcoin rose 3% to around $103,144, after bouncing back from earlier losses. It slid 6.1% on Tuesday to below $99,000 for the first time since June 22.

Oil prices fell as worries about global oversupply overshadowed data showing signs of strong U.S. demand for fuel. U.S. crude fell 96 cents to settle at $59.60 a barrel and Brent fell 92 cents to $63.52.

(Additional reporting by Amanda Cooper in London and Gregor Stuart Hunter in Singapore; Editing by Peter Graff, Hugh Lawson and Deepa Babington)