US STOCKS-Wall St rises after jobs data; debt default averted

(Updates prices throughout to open; adds shares of Amazon, telecom operators, S&P 500 sectors, Nasdaq milestone)

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Nasdaq set for best weekly winning streak since Jan 2020

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Data shows jobless rate at 3.7% in May; wage growth moderates

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Amazon up on report of co in talks for low-cost mobile services

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Materials, industrials lead S&P sectoral gains

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Indexes up: Dow 1.07%, S&P 0.68%, Nasdaq 0.36%

By Shreyashi Sanyal and Shristi Achar A

June 2 (Reuters) - U.S. stock indexes rose on Friday after a moderation in wage growth in May boosted bets that the Federal Reserve will skip raising interest rates this month, while investors cheered the country averting a catastrophic debt default.

The tech-heavy Nasdaq index touched its highest intraday level in over 13 months and headed for its sixth straight week of gains, its best streak since January 2020.

The Labor Department's closely watched employment report showed unemployment rate at 3.7% in May against a forecast of 3.5%, while average hourly earnings were at 0.3%, down from 0.4% in April, highlighting a cooling in wage inflation.

Non-farm payrolls increased by 339,000 jobs vs. expectations of 190,000 additions.

"This is a reflection of a labor market that, while still robust, is softening gently, not rapidly. That's exactly what the Fed would like to see," said Art Hogan, chief market strategist at B Riley Wealth in New York.

"The Fed wants to tame inflation without crushing the jobs market, and this is another piece of evidence that they're actually well along their way to getting that accomplished."

The data brought relief to investors who now expect the Fed to skip an interest rate hike this month for the first time since starting its aggressive policy tightening more than a year ago.

Fed funds futures trading showed an over 70% probability that the Fed will hold interest rates steady at its June 13-14 policy meeting.

Also lifting the mood, the Senate passed a bill late on Thursday to lift the government's $31.4 trillion debt ceiling, avoiding a catastrophic, first-ever default.

At 10:04 a.m. ET, the Dow Jones Industrial Average was up 353.96 points, or 1.07%, at 33,415.53, the S&P 500 was up 28.65 points, or 0.68%, at 4,249.67, and the Nasdaq Composite was up 47.77 points, or 0.36%, at 13,148.75.

Amazon.com Inc gained 1.6% after a report that the company is in talks with telecom operators to offer low-cost mobile services in the United States.

Telecom operators including Verizon Communications , T-Mobile US Inc and AT&T fell between 3.7% and 8.5%, while Dish Network Corp jumped 13.6%.

The S&P 500 communication services index, housing telecoms, fell 0.5% while the S&P 500 consumer discretionary sector, housing Amazon, soared 1.6%.

Eight of the 11 major S&P 500 sectors traded higher, with a 2.3% jump in materials leading gains after a report said China is mulling new measures to support the property market.

The S&P 500 industrials sector rose 1.4%, while Dow heavyweight Caterpillar gained 3.7%.

Advancing issues outnumbered decliners by a 4.74-to-1 ratio on the NYSE and by a 1.93-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and two new lows, while the Nasdaq recorded 43 new highs and 13 new lows.

(Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Nivedita Bhattacharjee and Maju Samuel)