By Wallace Witkowski and Joseph Adinolfi, MarketWatch

ISM services data and Twitter grab the spotlight

U.S. stocks climbed on Wednesday, trading near session highs as they rebounded from losses of the past two sessions, as rising oil prices and a resurgent services sector helped lift demand for stocks and other risk assets.

The Institute for Supply Management said its services index rocketed to a reading of 57.1, (http://www.marketwatch.com/story/ism-services-index-vaults-to-11-month-high-in-september-2016-10-05) up from 51.4 in August. However, a similar report from Markit showed a smaller gain.

It was "one of the better ISM services prints of this entire expansion," said Mike Antonelli, equity sales trader at R.W. Baird & Co.

The data helped support expectations that the Federal Reserve will raise interest rates before the end of the year, sparking a rally in financial shares, Antonelli said. Higher interest rates would help boost profits in banks' lending businesses.

"ISM services was very strong overall and had good numbers," said Mark Kepner, managing director of sales and trading at Themis Trading. If that's combined with a strong jobs report on Friday, that gives the Federal Reserve what it takes for a rate hike this year, Kepner said.

The S&P 500 index added 12 points, or 0.6%, to 2,162. Both the energy and financials sectors were up more than 1.5%, and defensive sectors, like telecom and utilities, weighed on the index.

The Dow Jones Industrial Average rose 131 points, or 0.7%, to 18,299, led by more than 2% gains in both Caterpillar Inc.(CAT) and Goldman Sachs Group Inc.(GS) Verizon Communications Inc.(VZ), down 1%, was the average's worst performer.

The Nasdaq Composite Index rose 35 points, or 0.7%, to 5,325.

U.S.-traded oil futures neared $50 a barrel for the first time since June, (http://www.marketwatch.com/story/oil-prices-higher-as-investors-look-to-us-inventory-data-2016-10-05) and settled up 2.3% at $49.83 a barrel. Some of day's best-performing stocks were energy firms, including Chesapeake Energy Corp.(CHK), which saw its shares lead the S&P 500 with a nearly 8% gain, and Transocean Ltd.(RIG), with shares up 6.2%.

On Tuesday, the S&P 500 and Dow both closed 0.5% lower (http://www.marketwatch.com/story/us-stock-futures-mostly-rise-joining-a-global-advance-2016-10-04) after Bloomberg reported that officials at the European Central Bank had agreed to gradually taper its bond-purchasing program. The report exposed the market's anxieties about central banks possibly withdrawing monetary support. Analysts blame widespread central-bank stimulus for inflating valuations of bonds and stocks.

Other markets: European stocks lost ground after Asian markets closed mixed. Gold futures (http://www.marketwatch.com/story/gold-rebounds-from-sharp-selloff-but-rally-is-seen-as-short-lived-2016-10-05) slipped, settling down 0.1% at $1,268.60 an ounce, as did a key dollar index after the ISM data.

Economic news: Amid a flood of U.S. economic reports, Automatic Data Processing Inc. reported that private-sector employers added 154,000 jobs last month (http://www.marketwatch.com/story/adp-reports-154000-jobs-added-in-september-2016-10-05), down from 175,000 in August. ADP's jobs reading is considered an important indicator of labor-market health, though it's rarely predictive of the Department of Labor's nonfarm payrolls report, one of the most widely watched pieces of U.S. economic data. The government's September jobs report is due Friday morning.

Markets largely ignored data showing the U.S. trade deficit increased by 3% in August.

On the Federal Reserve front, Minneapolis Fed President Neel Kashkari gave opening remarks at a conference in Minneapolis. Richmond Fed President Jeffrey Lacker was scheduled to speak twice at West Virginia's Marshall University--at 1 p.m. Eastern and 5 p.m. Lacker in a speech already this week has pushed for a "pre-emptive" Fed (http://www.marketwatch.com/story/feds-lacker-wants-central-bank-to-be-preemptive-like-1994-2016-10-04) on interest-rate moves. Neither Lacker nor Kashkari are voting members of the Fed's policy committee this year.

Check out:

Individual movers: Shares of Twitter Inc.(TWTR) rose 4.5% on expectations the social media company could field takeover bids this week (http://www.marketwatch.com/story/twitter-is-expected-to-field-bids-this-week-2016-10-04-201031423). Meanwhile, shares of Salesforce.com Inc.(CRM) dropped 5.2% after analysts warned an acquisition of Twitter could destroy up to 25% of Salesforce's value (http://www.marketwatch.com/story/a-salesforce-acquisition-of-twitter-could-destroy-25-of-companys-value-2016-10-05).

Netflix Inc.(NFLX) shares rose 3.8% as the streaming video company continues to be considered an acquisition target (http://www.marketwatch.com/story/disney-remains-center-of-merger-talk-this-time-its-netflix-2016-10-03) of Walt Disney Co.(DIS)

Agribusiness giant Monsanto Co.(MON), which is being acquired (http://www.marketwatch.com/story/bayer-ceo-defends-66-billion-monsanto-deal-2016-09-20) by German drug company Bayer AG(BAYN.XE), saw its shares tick 1.3% higher after its earnings for the most recent quarter topped estimates. (http://www.marketwatch.com/story/monsanto-earnings-top-estimates-amid-bayer-deal-2016-10-05)

Shares of Constellation Brands Inc.(STZ)--the parent company for Robert Mondavi wines and other alcoholic drinks--rose 1.8% after it reported quarterly profits that were higher than expected.

--Victor Reklaitis in London contributed to this article.

(END) Dow Jones Newswires

October 05, 2016 14:46 ET (18:46 GMT)

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