NEW YORK – Investors found another reason to buy up stocks Wednesday after a report indicated job losses might be slowing.
The ADP National Employment Report, an unofficial gauge of the labor market, said that private sector employment fell by 491,000 last month, a huge improvement from the 708,000 jobs lost in March. The ADP report said unemployment is likely to rise for several more months, but at a slower rate.
The news was a reassuring sign ahead of the Labor Department’s Friday report on job losses, and offered another sign that the economy’s slide could be moderating.
Confidence has been increasing on Wall Street amid improving economic data. Investors have been looking past mixed earnings reports, fears about a possible swine flu pandemic and a bankruptcy filing from Chrysler LLC to send the market up more than 30 percent from 12-year lows in early March.
Despite the good news on the job sector, many hurdles remain. Investors are still worried about the results of government “stress tests” on banks, due out Thursday, which will show which banks may need to raise more capital in order to be prepared for an even worse economic downturn.
“This obviously is lifting the spirits of the market,” said Peter Cardillo, chief market economist at Avalon Partners, referring to the ADP report. “But we have to get through the stress tests and the jobs report on Friday.”
In midmorning trading, the Dow Jones industrial average rose 25.33, or 0.3 percent, to 8,435.98. The blue chips at times traded above the 8,500 mark for the first time since Jan. 13, putting them within 3 percent of recouping the losses seen in 2009.
The Standard & Poor’s 500 index rose 4.34, or 0.5 percent, to 908.14, and the Nasdaq composite index fell 11.04, or 0.6 percent, to 1,743.08.
There has been much speculation about which banks are most in need of more cash. Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. are among those reportedly in that group.
On Wednesday, The New York Times reported federal regulators have told Bank of America Corp. it will need to raise about $34 billion — more than most expectations. The Wall Street Journal had a similar report. Bank of America was not immediately available to comment.
Bank of America rose $1.09, or 10 percent, to $11.93.
The reports due Thursday could upset Wall Street, but some analysts say the stress tests have already been factored into the market and that even knowing how much banks might need to raise will help eliminate uncertainty.
Financial stocks have been the driving force of the market’s enormous two-month advance, which was touched off by big bank CEOs who said business was improving. However investors are still worried out mounting loan losses at the banks.
In other trading, the Russell 2000 index of smaller companies rose 1.30, or less than 0.1 percent, to 503.85.
Four stocks rose for every three that fell on the New York Stock Exchange, where volume came to 368 million shares.
Bond prices rose, pushing the yield on the benchmark 10-year Treasury note down to 3.16 percent from 3.17 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 37 cents to $54.21 per barrel on the New York Mercantile Exchange.
In afternoon trading overseas, Britain’s FTSE 100 rose 2.3 percent, Germany’s DAX index rose 1.5 percent, and France’s CAC-40 rose 2.2 percent. Markets in Japan were closed for a holiday.