US STOCKS-Wall St higher but set for worst qtr in four years

* Sept pvt sector jobs data better than expected

* Yellen scheduled to speak later in the day

* Indexes up: Dow 0.98 pct, S&P 1.27 pct, Nasdaq (NasdaqGS: NDAQ - news) 1.65 pct (Updates to late afternoon, changes byline)

By Sinead Carew

Sept 30 (Reuters) - U.S (Other OTC: UBGXF - news) . stocks rose on Wednesday as investors picked up beaten-down stocks, but all three major indexes were on track for their worst quarter since 2011.

For most of the third quarter, global markets were rocked by fears of slowing growth in China. Adding to the uncertainty, the U.S. Federal Reserve held off on raising interest rates at its September meeting.

Investors will be keen to put the bruising quarter behind them and look ahead to the third-quarter earnings season, which begins next week.

Data on Wednesday showed the U.S. private sector added more jobs than expected in September, raising hopes for a strong reading in the government's payrolls report due Friday.

The Fed has said it needs to see more improvement in the labor market and be confident that inflation will increase before raising rates for the first time since 2006. Inflation remains below the Fed's 2 percent target.

Investors will look for clues on the timing of a rate hike when Fed Chair Janet Yellen and St. Louis Fed President James Bullard speak at a conference in St. Louis before the market close Wednesday.

Yellen said last week the central bank remained on track to raise rates this year. The Fed meets next on Oct (HKSE: 3366-OL.HK - news) . 27-28.

"The market is in a relief rally after five days of selloff and as investors rebalance their portfolios," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

For stocks to rally in the fourth quarter, investors need more clarity from the Fed and signs of improvement in China's economy, Hogan said.

The global economy, however, is expected to remain weak in the near term. IMF head Christine Lagarde said on Wednesday a relentless deceleration in the economies of the developing world would cause global growth to slow this year.

At 2:32 p.m., the Dow Jones industrial average rose 156.77 points, or 0.98 percent, to 16,205.9, the S&P 500 gained 23.84 points, or 1.27 percent, to 1,907.93 and the Nasdaq Composite added 74.47 points, or 1.65 percent, to 4,591.79.

All 10 S&P sectors were higher, with the consumer discretionary index's 2.27 percent rise leading the gains.

The Nasdaq biotechnology index was up 2.6 percent as investors continued to seek bargains in the sector, which took a beating after Democratic presidential candidate Hillary Clinton criticized drug pricing last week.

Although the market's recent rout has forced many strategists to slash expectations, a Reuters poll shows the S&P 500 is expected to end 2015 roughly 11 percent above current levels.

Advancing issues outnumbered declining ones on the NYSE by 2,143 to 886, for a 2.42-to-1 ratio on the upside; on the Nasdaq, 1,927 issues rose and 825 fell for a 2.34-to-1 ratio favoring advancers.

The S&P 500 posted 2 new 52-week highs and 18 new lows; the Nasdaq recorded 18 new highs and 160 new lows. (Additional reporting by Abhiram Nandakumar and Tanya Agrawal; Editing by Saumyadeb Chakrabarty and Nick Zieminski)