US open: Stocks rise as investors weigh private payrolls report

US stocks gained on Wednesday as lacklustre private payrolls jobs data made the chances of an interest rate hike by the Federal Reserve seem less likely.

At 1557 BST the Dow Jones Industrial Average rose 0.53% to 18,263.71 points, the S&P 500 increased 0.39% to 2,158.98 points and the Nasdaq jumped 0.52% to 27.35 points.

At the same time oil prices rose after the Energy Information Administration revealed US weekly crude inventories fell by three million barrels last week to 499.7 million barrels.

On Tuesday the American Petroleum Institute said crude inventories dropped 7.6 million barrels last week.

West Texas Intermediate edged up 2.2% to $49.81 per barrel and Brent increased 2.07% to $51.95 per barrel.

Meanwhile, private US employers added 154,000 jobs in September, according to payroll processor Automatic Data Processing and forecasting firm Moody’s Analytics, missing expectations of 165,000. The previous month was revised down to 175,000 from the initial estimate of 175,000.

The slowdown was driven by the services sector, which Barclays Research said is a “concern and is a risk to our outlook for economic activity”.

“However, in this instance, the slowing in services growth, relative to recent trends, is concentrated in trade, transportation, and utilities,” the bank added.

“This series tends to be related to the pace of manufacturing activity in the US. As such, the slowdown in services is likely a manifestation of a still-weak manufacturing sector rather than a change in trend in the health of services sector more generally.”

The report comes ahead of Friday’s all-important non-farm payrolls, which is expected to show employers added 170,000 jobs in September.

A separate report showed the US service sector improved more than expected in September to a 11-month high. The Institute for Supply Management’s index of non-manufacturing activity rose to 57.1 from 51.4 in August, comfortably beating expectations for a reading of 53.0.

US factory orders grew by 0.2% month-on-month in August to $453.1bn, according to the Commerce Department. Economists had pencilled in a drop of 0.5%.

Orders for durable goods were up 0.1% month-on-month to $227.3bn after rising 3.6% in July, beating estimates for no change.

In company news, Twitter rallied amid speculation that the social media company could consider takeover bids this week.

Chesapeake Energy Corp. advanced as the rise in oil prices boosted energy shares.

Agribusiness giant Monsanto Co. was on the front foot after reporting better-than-expected quarterly earnings.