US STOCKS-Wall St climbs as weak private jobs data boost rate cut hopes

* U.S. ADP private job gains lowest since March 2010
* Bets of an interest rate cut increase
* Campbell Soup, Salesforce.com gain after forecasts
* Utilities, real estate, consumer staples gain the most
* Indexes up: Dow 0.82%, S&P 500 0.82%, Nasdaq 0.64%

(Updates to close)
By Sinéad Carew
NEW YORK, June 5 (Reuters) - Wall Street's major indexes
rose on Wednesday as investors bet on a Federal Reserve interest
rate cut after weak private sector jobs data and hopes grew that
the United States and Mexico would reach an agreement to avoid
U.S. tariffs on Mexican goods.
The gains extended the rally on Tuesday when Fed Chairman
Jerome Powell indicated the central bank may have to react to
the U.S. trade wars, boosting rate cut hopes. Other Fed
officials also hinted that a rate cut was possible. The ADP National Employment Report on Wednesday further
bolstered bets for a rate cut. U.S. private employers hired at
the slowest pace in more than nine years in May, weakness that
analysts blamed on the heightening global trade tensions.
The data comes ahead of more comprehensive nonfarm payrolls
data from the Labor Department due out on Friday. MMT/
"Today and yesterday the market was embracing the idea of
more weakness in the economy giving the Fed some cover to
preemptively cut rates. If the excuse evaporates with a strong
jobs number Friday the market might be disappointed," said
Jeffrey Kleintop, Chief Global Investment Strategist at Charles
Schwab in Boston.
For now, he said, the market is betting the Fed will make a
precautionary rate cut in July.
The Dow Jones Industrial Average .DJI rose 207.39 points,
or 0.82%, to 25,539.57, the S&P 500 .SPX gained 22.88 points,
or 0.82%, to 2,826.15 and the Nasdaq Composite .IXIC added
48.36 points, or 0.64%, to 7,575.48.
Investors were also encouraged after U.S. President Donald
Trump said he thinks Mexico wants to reach a deal to stop a new
trade war. A White House trade adviser and a senior U.S.
Republican senator also said Washington might not introduce
proposed tariffs. A Mexico deal "would alleviate one of the risks that lurk
out there," said Mark Luschini, chief investment strategist at
Janney Montgomery Scott in Philadelphia who also cited the
prospects of rate hike cuts.
Schwab's Kleintop saw the prospect of rate cuts as a bigger
factor because defensive dividend sectors that do well in low
rate environments were outperforming more trade-sensitive
sectors in Wednesday's rally.
The top gainers among the S&P 500's 11 major sectors were
real estate .SPLRCR which ended up 2.3%, while utilities
.SPLRCU closed up 2.1% and consumer staples .SPLRCS
registered a 1.1% advance.
But a rally with defensive sectors outperforming more
cyclical sectors made Janney Montgomery Scott's Luschini wary.
"You'd want to see materials, energy, industrials,
financials leading the rally," he said. "I'd be reluctant to
chase this rally because it might just be a snapback rebound."
The technology sector .SPLRCT rose 1.4% and provided the
biggest boost to the market, helped by Apple Inc AAPL.O and
Microsoft Corp MSFT.O . Another big boost was Salesforce.com
Inc CRM.N , which advanced 5.1% after the cloud-based service
provider forecast full-year results above expectations.
The energy sector .SPNY slipped 1.1%, making it the only
S&P sector in the red, as crude prices fell sharply. O/R
Campbell Soup Co CPB.N , the biggest percentage gainer on
the S&P 500, rose 10% after the canned soup maker raised its
full-year profit forecast. Advancing issues outnumbered declining ones on the NYSE by a
1.09-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored decliners.
The S&P 500 posted 66 new 52-week highs and 7 new lows; the
Nasdaq Composite recorded 68 new highs and 117 new lows.
On U.S. exchanges 7.02 billion shares changed hands compared
with the 7.12 billion average for the last 20 sessions.