NEW YORK (TheStreet) -- Stocks accelerated gains by mid-morning Wednesday after the U.S. trade deficit retreated from multi-year highs and crude inventories saw another weekly decline.
The S&P 500 was up 0.55%, the Dow Jones Industrial Average climbed 0.8%, and the Nasdaq added 0.66%.
Crude inventories fell 1.9 million barrels in the week ended May 30. Analysts had expected a decline of 1.7 million barrels after a drop of 2.8 million barrels a week earlier. Inventories have been on the decline as U.S. oil producers shutter unprofitable rigs in the face of lower oil prices.
Non-manufacturing activity expanded at a slower-than-expected rate in May, according to the ISM Non-Manufacturing Index. The measure of the services industry fell back to 55.7, below forecasts for 57.2 after a 57.8 reading in April. Any reading above 50 indicates expansion.
The U.S. trade deficit retreated 19.2% in April to $40.9 billion after hitting a seven-year high of $50.6 billion in March that was tied to West Coast port closures. Economists expected a slightly wider deficit of $43.5 billion. The lower trade deficit will likely boost second-quarter GDP as the economy continues to comb out the kinks from port backlogs.
"The drop back in the trade deficit ... confirms that the spike in March was a temporary surge caused by the ending of the West Coast port dispute in February and possibly the timing of the Chinese New Year holiday," said Capital Economics chief U.S. economist Paul Ashworth.
The U.S. private sector added 201,000 jobs in May, the most jobs added in four months, according to the ADP jobs report. Analysts had expected an increase of 200,000 after 169,000 additions in April.
"The relative strength in today's report is an encouraging sign that the labor market, and the economy, is re-accelerating after a winter slowdown," said Dan Greenhaus, chief strategist at BTIG Research. "One report does not a trend make but in conjunction with other such data points, it appears the second quarter is set to be much better than the first quarter."
The private payrolls data foreshadows Friday's widely anticipated nonfarm payrolls from the Labor Department. Economists expect the U.S. economy to have added 225,000 jobs in May.
The ECB kept its key interest rates unchanged at lows on signs the eurozone is steadily improving thanks to the central bank's monthly bond purchases. The ECB left its main interest rate at 0.05%, a level it has remained at since last September. Analysts expected the ECB to leave the rate steady.
ECB President Mario Draghi said in a press conference that eurozone inflation had "bottomed out" at the beginning of the year due to monetary policy, falling oil prices and a weaker euro. The ECB raised consumer inflation forecasts to 0.3% for the full year, up from a previously expected flat reading.
European markets rallied after Draghi's comments. Germany's DAX was up 0.84%, France's CAC 40 added 0.54%, and the FTSE 100 in London added 0.56%.
The Organization for Economic Cooperation and Development cut its growth forecasts for global growth through to 2016, citing a weak recovery and sluggish investment. The OECD forecasts global growth of 1.9% in 2015 and 2.5% in 2016. The body dropped its forecast for U.S. growth to 2% from 3.1% in 2015 and 2.8% from 3% in 2016.
Groupon (GRPN) was down 2% after Chief Financial Officer Jason Child announced his will step down at the end of July. Brian Kayman, vice president of tax and treasury, will act as interim finance chief. The company also announced a new share buyback authorization which will continue through to August 2017 and add to a previously announced $300 million repurchase program.
Wendy's (WEN) climbed more than 4% after announcing a $1.4 billion buyback. The company also increased its forecast for full-year earnings to 31 cents to 33 cents a share.
Guess? (GES) was slightly lower despite swinging to a first-quarter profit of 4 cents a share from a loss of 3 cents a year earlier. Revenue slid 8% to $479 million.
Vera Bradley (VRA) shares were on watch after the company reported break-even earnings in the first quarter, 2 cents shy of estimates. Revenue of $101.1 million was down 10% from a year earlier.
Amazon (AMZN) will provide free shipping for lighter items weighing 8 ounces or less in a move that rivals eBay's (EBAY) free-shipping policies for smaller and low-cost goods. The new program will be called Fulfillment by Amazon Small and Light.