Stocks eked out a fifth day of gains on Wednesday as U.S.-China trade talks resumed amid hopes that the two sides will soon reach a deal to end the costly tariff conflict between the two largest economies in the world.
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Technology and chip stocks led the gains with the Philadephia Semiconductor index hitting an all time high.
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Gains were pared, however, on a report that U.S. private-sector hiring last month grew by less than expected and also a steeper-than-expected decline last month in service-sector activity.
Carsten Brzeski, chief economist at ING Germany, said trade talks "between China and the U.S. have, for now, produced positive news as a deal has moved closer," according to the Wall Street Journal.
Hiring in the U.S. private sector grew by 129,000 jobs in March, according to the ADP National Employment report, missing analyst expectations of 170,000 jobs. February’s tally was revised higher to 197,000 from 183,000.
It marked the slowest employment increase in 18 months, according to Ahu Yildirmaz, the vice president of the ADP Research Institute.
“Although some service sectors showed continued strength, we saw weakness in the goods producing sector," she said in a statement.
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Mark Zandi, chief economist at Moody’s Analytics, which partners with ADP on the report, said, “The job market is weakening, with employment gains slowing significantly across most industries and company sizes. Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening. If employment growth weakens much further, unemployment will begin to rise.”
There is a strong correlation between the ADP private payrolls figure and the government’s nonfarm jobs report due out on Friday. The big miss in Tuesday's ADP report raises the probability that March’s nonfarm jobs number comes in below the estimate of 180,000.
Meanwhile, another report found that strong demand caused China's service sector to rise to a 14-month high in March.
Crude oil prices climbed to a five-month high as the U.S. inventory of the commodity fell by 425,000 barrels. The price of the benchmark U.S. crude, West Texas Intermediate, is now up four days in a row.
In Asia, the Hang Seng closed up 1.22 percent, the Shanghai Composite added 1.24 percent and Japan's Nikkei 225 increased 0.97 percent.
European stocks were also higher: Britain's FTSE 100 was up 0.10 percent, France's CAC 40 climbed 0.60 percent and Germany's DAX increased 1.32 percent.