Wall Street rises on ADP jobs data and Fed's move

By Steven C. Johnson

NEW YORK (Reuters) - The Dow industrials and S&P 500 rose on Wednesday as a surprising increase in private-sector employment and central bank efforts to boost liquidity in stormy financial markets offset a surge in oil prices.

Bank stocks rose after the Federal Reserve and other central banks said they would boost measures to stabilize financial companies struggling with credit losses.

The price of oil rose nearly 4 percent after weekly inventory data showed a decline in gasoline stockpiles, sparking supply concerns.

While higher oil prices crimp consumer and business spending, they also boost shares of energy companies, which lifted the Dow and S&P. Shares of Exxon Mobil (XOM.N) climbed 4 percent and Chevron jumped 5 percent.

A private-sector employment report showing employers added 9,000 jobs in July set the tone early in the day. The data surprised economists, who had expected another month of job losses and raised hopes for a stronger-than-expected government jobs report on Friday.

"The ADP was encouraging. If they're on the right track and Friday's payroll number comes in better than expected, then that would be very positive," said Bill Strazzullo, partner and chief market strategist at Bell Curve Trading in Boston.

The Dow Jones industrial average .DJI shot up 186.13 points, or 1.63 percent, to 11,583.69. The Standard & Poor's 500 Index .SPX advanced 21.06 points, or 1.67 percent, to 1,284.26. The Nasdaq Composite Index .IXIC gained 10.10 points, or 0.44 percent, to 2,329.72.

The rally accelerated in the last half hour of trading as traders reversed bets that stocks would fall, known as covering short positions. The late gains helped pull the Nasdaq out of negative territory.