Wall St up on positive US jobs news

Traders Fred Demarco, left, and Joseph Chirico, right, work on the floor of the New York Stock Exchange. File photo / AP.

Wall Street rose overnight, with a late burst of buying, on positive jobs data, setting aside news that euro-zone leaders told Greece they won't negotiate a new bailout offer until after the July 5 referendum.

"There were hopes of a deal earlier in the morning and the hopes are literally taken off the table," Adam Sarhan, chief executive of Sarhan Capital in New York, told Reuters.
Fresh talks broke down after Greek Prime Minister Alexis Tsipras told Greek voters to reject an international aid proposal in the upcoming referendum.

"Given the political situation, the rejection of the previous proposals, the referendum which will take place on Sunday, and the recommendation by the Greek government to vote 'no,' we see no grounds for further talks at this point," Eurogroup President Jeroen Dijsselbloem said in a statement after a conference call discussing Tsipras' Tuesday night proposal.

Europe's Stoxx 600 Index ended the day with a 1.5 per cent gain from the previous close. The UK's FTSE 100 Index rose 1.3 per cent, France's CAC 40 Index advanced 1.9 per cent, while Germany's DAX gained 2.2 per cent.

Most of the gains came after reports that Tsipras had sent a letter outlining general acceptance of the current creditors' offer. Gains were pared after Tsipras's address to the nation.

In New York, the Dow Jones Industrial Average gained 0.8 per cent, while the Standard & Poor's 500 Index rose 0.7 percent, and the Nasdaq Composite Index increased 0.5 per cent.

The latest US jobs, manufacturing and housing data were solid.

An ADP report showed private employers added a better-than-expected 237,000 jobs in June, the biggest gain since December. Separately, the Institute for Supply Management's factory index climbed to 53.5 in June, up from 52.8 in May.

"Manufacturing has picked up after a lull -- with fits and starts, it's gradually re-accelerating," Robert Stein, deputy chief economist at First Trust Portfolios in Wheaton, Illinois, told Bloomberg. "It's not gangbusters, white-hot economic boom by any stretch of the imagination, but we are making progress."

Finally, construction spending rose 0.8 percent to an annual rate of $1.04 trillion in May, which was the highest level since October 2008.

The data add to expectations the US Federal Reserve will raise interest rates soon, with most anticipating a September hike. That seems less of an issue for investors at the moment as the rise will reflect a more buoyant economic outlook, a positive for corporate profits. On Thursday the government publishes its highly anticipated monthly nonfarm payrolls report.

"The economy has shifted back into solid growth mode," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "A strong June jobs number would make it clear the economy can absorb a rate hike and the Fed can move at any time it wants."

Gains in shares of Travelers Cos and those of Procter & Gamble, up 2.8 percent and 1.9 percent, helped propel the Dow higher.

US airline stocks dropped as the Justice Department confirmed an Associated Press report it is investigating whether the nation's carriers are working together to bolster airfares.

Shares of Delta Air Lines dropped 1.9 percent, while those of American Airlines fell 2.8 percent.