* Merck up as FDA panel narrowly votes to back COVID pill

* Private payrolls, factory activity increase in November

* Salesforce falls on disappointing profit forecast

* Indexes up: Dow 0.95%, S&P 1.39%, Nasdaq 1.42% (Updates to open)

By Devik Jain and Ambar Warrick

Dec 1 (Reuters) - The S&P 500 and the Nasdaq jumped more than 1% on Wednesday following a sharp sell-off triggered by concerns over rising inflation and the new Omicron coronavirus variant, while shares of Merck rose on progress in approval of its COVID-19 pill.

Merck & Co Inc gained 1.8% after a panel of advisers to the U.S. Food and Drug Administration narrowly voted to recommend the agency authorize the drugmaker's antiviral pill to treat COVID-19.

All of the 11 major S&P sectors advanced in early trading, with energy, materials and financials leading the gains.

Banks added 2.3%, recouping losses suffered in the previous session.

U.S. stocks slumped on Tuesday after Federal Reserve Chair Jerome Powell in his testimony before the Senate Banking Committee indicated that he no longer considers inflation as "transitory."

Powell also said the U.S. central bank would consider bringing forward plans for tapering its bond buying program at its next meeting in two weeks.

"Most investors realized that the Fed was going to have to shift course somewhat ... there's plenty of people that feel inflation is a bigger problem, and maybe a bigger risk to the market would be the Fed failing to take any action that recognizes that," said Rick Meckler, partner, Cherry Lane Investments in New Vernon, New Jersey.

"Coming to the year-end, where markets can be a little less liquid, we are likely to see some back and forth until we get more information (on Omicron)."

Investors were also awaiting a Fed report, known as the "Beige Book," on current economic conditions to provide further insight into the central bank's stance on inflation. The report is due at 2:00 p.m. ET (1900 GMT).

Powell's seemingly hawkish comments on Tuesday served as a double whammy for markets, which were already nervous about the spread of the Omicron variant and its potential to hinder a global economic recovery.

A World Health Organization official said some of the early indications were that most Omicron cases were mild, with none severe.

At 10:06 a.m. ET, the Dow Jones Industrial Average was up 327.06 points, or 0.95%, at 34,810.78.

The S&P 500 was up 63.49 points, or 1.39%, at 4,630.49, and the Nasdaq Composite was up 220.85 points, or 1.42%, at 15,758.54, supported by shares of Amazon.com , Apple Inc, Tesla Inc, Google owner Alphabet Inc, Meta Platforms and Microsoft Corp . All these tech companies added between 0.6% and 2%.

Meanwhile, separate data showed U.S. private employers maintained a strong pace of hiring in November, while manufacturing activity picked up amid strong demand for goods.

Salesforce.com Inc forecast current-quarter profit below estimates as it faces stiff competition from rivals including Microsoft, sending its shares down 6.7%.

Advancing issues outnumbered decliners by a 5.99-to-1 ratio on the NYSE and by a 2.53-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and two new lows, while the Nasdaq recorded 22 new highs and 41 new lows. (Reporting by Devik Jain, Ambar Warrick and Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)