S&P 500 edges higher as financials gain on ADP jobs report

The benchmark S&P 500 broke a two day losing streak on Wednesday as a stronger-than-expected ADP report on private sector job growth prompted investors to ratchet up their interest rate expectations and provided a fillip to bank stocks.

US markets edged slightly higher following the report, which showed private employers added 298,000 jobs in February, much more than the 189,000 rise that the market had expected.

The S&P 500 added 0.1 per cent to 2,371.51, with the financial sector – up 0.7 per cent – leading the gains. Higher interest rates are considered a positive for banks since it could boost their net interest margins — the difference in their own cost of funding and the rate they charge to borrow.

Elsewhere, the Nasdaq Composite rose 0.4 per cent to 5,857.74 and the Dow Jones Industrial Average was flat at 20,925.36.

Shares in the utilities sector, often seen as a haven asset, were 1.5 per cent lower. Likewise, the price of US Treasuries were lower with the 10-year note’s yield, which moves inversely to price, up 3.8 basis points to 2.56. The dollar index, measuring the US dollar against a basket of its peers, rose 0.18 per cent to 101.99 extending its two days of gains.

Globally, markets were mostly stronger on Wednesday. The Euro Stoxx 600 added 0.3 per cent after four days of losses, while London’s FTSE 100 rose 0.1 per cent to 7,345.77. China’s Hang Seng was 0.4 per cent higher, whereas Japan’s Nikkei 225 fell 0. 5 per cent.