Wall St rises as weak economic data fuels rate-pause optimism

Aug 30 (Reuters) - The S&P 500 (.SPX) and Nasdaq (.IXIC) rose on Wednesday as fresh economic data signaled a cooling U.S. economy, reinforcing expectations the Federal Reserve will pause rate hikes in September.

The S&P 500 index traded at its highest in nearly three weeks after an ADP National Employment report showed private payrolls increased by 177,000 jobs in August, compared with estimates of 195,000, suggesting a softening labor market.

Fresh gross domestic product (GDP) numbers showed the U.S. economy expanded 2.1% in the second quarter, slower than a preliminary estimate of a 2.4% growth.

"Somewhat softer employment data is easing investor concerns for future Federal Reserve interest rate hikes," said Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management.

The prospect of a "softer landing" for the U.S. economy also supported demand for growth stocks and other riskier assets at the expense of defensive stocks, Haworth added.

Of the 11 S&P 500 sector indexes, eight rose, led by information technology (.SPLRCT), up 0.62%, followed by a 0.42% gain in energy (.SPNY).

Mastercard (MA.N) and Visa (V.N) added 0.8% and 0.4%, respectively, after a report said the companies were preparing to raise credit card fees.

HP Inc(HPQ.N) tumbled 7.1% after the personal computer maker trimmed its annual forecast due to slowing demand.

Traders' bets on the Fed leaving interest rates unchanged in September stood at nearly 89%, up from 86% the day before, while bets of a pause in November rose to 54% from about 52%, the CME Group's FedWatch tool showed.

U.S. Treasury yields slipped to a near three-week low, with the 10-year yield last at 4.1%.

The S&P 500 was up 0.23% at 4,507.83 points.

The Nasdaq Composite Index gained 0.27% to 13,981.96 points, while the Dow Jones Industrial Average was unchanged at 34,853.99 points.

Chipmaker Nvidia climbed 1.3%, while Apple (AAPL.O) added more than 1%.

Investors are now looking to the personal consumption expenditures price index, the Fed's preferred measure of inflation, and non-farm payroll numbers due on Thursday and Friday, respectively, for more clues on interest rates.

Trading activity has been light this week ahead of the U.S. Labor Day holiday on Monday.

Brown-Forman (BFb.N) fell 4% after the Jack Daniels whiskey maker missed its first-quarter sales and profit estimates.

Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) by a 1.6-to-one ratio.

The S&P 500 posted 23 new highs and one new low; the Nasdaq recorded 59 new highs and 62 new lows.

Reporting by Shristi Achar A and Amruta Khandekar in Bengaluru and by Noel Randewich in Oakland, Calif; Editing by Savio D'Souza, Vinay Dwivedi and Richard Chang

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