US stocks rose and Treasuries erased early gains as data showed better-than-forecast growth in payrolls and service industries, offsetting concern over China's economy. Commodities fell as the dollar strengthened.

The Standard & Poor's 500 Index climbed 0.3 per cent to 1,449.79 at 3:39 p.m. in New York, paring a rally of as much as 0.6 per cent as declines in energy producers and Hewlett-Packard Co. weighed on the market. Ten-year Treasury yields were little changed at 1.61 per cent after falling two basis points earlier. The S&P GSCI gauge of 24 raw materials dropped 2.3 per cent, the most since July, as oil and natural gas tumbled at least 3.9 per cent. The dollar appreciated against 14 of 16 major peers.

S&P 500 futures turned higher before the open of exchanges in New York after ADP Employer Services said companies added 162,000 jobs last month, topping the median forecast of economists surveyed by Bloomberg for a 140,000 advance. Service industries in the US expanded more than forecast in September. Futures and European stocks slipped earlier as a report showed Chinese services industries expanded at the weakest pace since at least March 2011.

"There has been an ongoing tug of war as to whether or not the liquidity coming into the markets can counteract perhaps weaker earnings," Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial, which oversees $US943 billion, said by phone. While today's data "are positive underpinnings for the market," she said, the range-bound trading "will continue until investors feel comfortable enough to go in with longer positions in the equity market. Market participants are still worried about the economy."

Jobs Data

The ADP data comes two days before a government jobs report that economists forecast will show the nation added 115,000 jobs last month and the unemployment rate increased to 8.2 per cent from 8.1 per cent.

The S&P 500 is down 1.1 per cent from an almost five-year high set on Sept. 14, trimming a drop of as much as 2.2 per cent. Gauges of telephone, consumer-discretionary and financial shares led gains in eight of the 10 main industry groups in the S&P 500 today.

Best Buy Co. jumped on a Reuters report the retailer's founder and buyout firms are scrutinizing the company's finances. Monsanto Co. fell as the world's largest seed company forecast 2013 earnings below analyst estimates. Hewlett-Packard Co. tumbled as Chief Executive Officer Meg Whitman projected a profit decline for fiscal 2013 as a turnaround effort at the struggling computer maker takes longer than expected.

The Stoxx Europe 600 Index fell 0.1 per cent after slumping 0.5 per cent earlier. The volume of shares changing hands in the index's companies was 17 per cent less than the 30-day average, before a meeting of European Central Bank policy makers tomorrow, according to data compiled by Bloomberg.

European Movers

FirstGroup Plc plunged 21 per cent, the most on record, after the U.K. rail operator was stripped of the right to operate West Coast trains from London to Scotland. EasyJet Plc climbed 3.5 per cent as Europe's second-biggest discount airline said full-year earnings beat its forecasts.

Oil declined 4.1 per cent to $US88.14 a barrel after a government report showed that US crude output climbed to the highest level in more than 15 years and fuel consumption decreased. Natural gas lost 3.9 per cent, the most in seven weeks, on forecast of moderating temperatures. Gasoline dropped 2.4 per cent as 18 of 24 commodities tracked by the S&P GSCI retreated.

Emerging Markets

The MSCI Emerging Markets Index fell 0.4 per cent, declining for the first time in five days. The Hang Seng China Enterprises Index slid as much as 0.4 per cent, the most in a week, before paring its loss to less than 0.1 per cent. Financial markets in China and South Korea were closed.

China's purchasing managers' index fell to 53.7 in September from 56.3 in August, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing.

Australia's dollar declined for a fourth straight day as the nation recorded its widest trade deficit since 2008 in August. It dropped to as low as $US1.0196, the weakest level since Sept. 6.

South Africa's rand depreciated 0.8 per cent against the dollar on rising expectations the central bank will cut interest rates to stimulate growth. The dollar strengthened against 14 of 16 major currencies, up 0.1 per cent at $US1.2903 per euro and 0.5 per cent higher at 78.52 yen.

European Yields

Yields on 10-year Italian government bonds increased one basis point to 5.04 per cent, after earlier slipping below 5 per cent. The rate on similar-maturity Spanish securities added six basis points to 5.81 per cent.

Spanish Prime Minister Mariano Rajoy said yesterday he has no plans to request rescue funds in the near term, defying market speculation that the nation would ask for a bailout which would pave the way for the ECB to buy its debt.

There's "ongoing uncertainty about the timing of Spain's formal request for an official program and concerns about global growth," Barclays Plc's head of European currency strategy, Guillermo Felices, wrote in a report to investors. "We remain constructive on risky assets, but think better news is needed on both fronts for the rally to regain momentum."

The cost of insuring European corporate and sovereign debt using credit-default swaps fell for a third day, to the lowest levels in more than a week. The Markit iTraxx Crossover Index of swaps on 50 mostly junk-rated companies declined eight basis points to 549.

Portuguese debt agency IGCP bought 3.76 billion euros ($US4.9 billion) of bonds due next year in exchange for securities due in 2015 as the nation takes steps to return to international credit markets.

BLOOMBERG