Stock futures signal higher open after ADP jobs gains

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U.S. stock index futures pointed to a higher open on Wednesday as data showed private employers added jobs in a sign of economic improvement and acquisition activity lifted sentiment.

Private employers created 201,000 jobs in March, according to ADP Employer Services, a rise that was in line with expectations.

The report by the payrolls processor is closely watched for insight into the health of the labor market, although it has little correlation with the government's broader non-farm payrolls report due on Friday.

ADP "shows that the labor recovery continues at a reasonable pace," said David Katz, chief investment officer at Matrix Asset Advisors in New York, adding that "the improving labor market should be a buffer against weak areas" of the economy.

In the latest M&A activity, Canadian drugmaker Valeant Pharmaceuticals International on Tuesday (VRX.TO)(VRX.N) made an unsolicited bid to buy Cephalon Inc (CEPH.O) for $5.7 billion, sending the stock up 29 percent to $75.97 in premarket trading while U.S.-listed shares of Valeant rose 16 percent to $51.40.

The bid follows AT&T Inc's (T.N) recent proposed purchase of T-Mobile USA and eBay Inc's (EBAY.O) bid for GSI Commerce (GSIC.O), signs that stocks could be viewed as cheap.

"We expect to see acceleration in merger activity, which we think is a reasonable way for companies to redeploy cash and accelerate long-term growth," Katz said.

Chemical company and Dow component DuPont (DD.N) extended its $6 billion takeover bid for Denmark's Danisco (DCO.CO) by four weeks. DuPont shares rose 0.8 percent to $55 in light premarket trading.
 
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