* Futures up: S&P 7.5 pts, Dow 57 pts, Nasdaq 7.75 pts
* Rally looks set to continue after Dow record on Tuesday
* Private sector employment gains by 198,000 in Feb
By Leah Schnurr
NEW YORK, March 6 (Reuters) - Wall Street was set to drive
the rally further on Wednesday, the day after the Dow set a new
record, as hiring by companies rose strongly last month.
Signs of a strengthening U.S. economy, continued support
from the Federal Reserve, and fairly attractive valuations
compared with other assets have helped U.S. equities rally this
On Tuesday, the Dow ended at 14,253.77, breaking through
October 2007's record close of 14,164.53. For the year, the Dow
is up more than 8 percent. The S&P has gained 8 percent in the
first three months of the year and is less than 2 percent below
its record close.
The larger S&P 1500 has already reached record
highs, thanks to help from smaller-cap companies.
"I think this is a happiness hangover," said Kim Forrest,
senior equity research analyst at Fort Pitt Capital Group in
"What's happening today is probably people that had been
extremely risk-averse during the roller coaster ride are now
feeling comfortable and, sadly, that's really not the time to
buy in when we're hitting new highs."
Forrest said investor attention should start to turn to the
labor market, with the closely watched non-farm payroll report
due on Friday. Despite signs of strength in some areas of the
economy, the labor market has been healing only slowly.
But an early look at the jobs market on Wednesday was
surprisingly strong, with companies adding 198,000 jobs last
month, above estimates for 170,000. January's job gain was also
revised up to 215,000. Futures added to gains following the
"The ongoing level of the labor market recovery continues to
impress investors and that is once again reinforced by these
numbers," said Andrew Wilkinson, chief economic strategist at
Miller Tabak & Co LLC in New York.
"Manufacturers and business leaders are telling us that the
demand has picked up, that they are short of inventory and that
they are adding workers."
S&P 500 futures were up 7.5 points and were above
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures gained 57
points, and Nasdaq 100 futures added 7.75 points.
Overnight in Europe, stock markets rose to their highest
since the 2008 financial crisis. The European Central Bank, the
Bank of England and the Bank of Japan are all expected to stick
to ultra-easy monetary policy at meetings this week.
Other U.S. data on tap includes factory orders for January
and the Fed's Beige Book of economic conditions.
EU antitrust regulators fined Microsoft 561 million
euros ($731 million) for breaking a promise to offer European
consumers a choice of web browser. Shares were off 0.5 percent
at $28.20 in pre-market trading.
Staples tumbled 2.9 percent to $12.90 after the
company reported lower-than-expected quarterly revenue and
forecast weak full-year earnings.
Shares of drone maker Aerovironment slumped 28.9
percent to $15.43 after the company cut its full-year forecast
on delays in government orders.