* Vote on healthcare bill delayed until next month
* ECB sources say stimulus withdraw over interpreted
* KB Home, General Mills rise after strong quarterly
* Indexes up: Dow 0.59 pct, S&P 0.75 pct, Nasdaq 0.89 pct
(Adds details, changes comment, updates prices)
By Tanya Agrawal
June 28 (Reuters) – Wall Street was higher in late morning
trading on Wednesday as financial and consumer stocks led a
broad rally among the major sectors.
Bank stock reflected a rise in treasury yields, following a
Reuters report that the market had overinterpreted chief Mario
Draghi’s comments that the ECB was ready to start withdrawing
the emergency stimulus for the economy.
The sources clarified that Draghi intended to signal
tolerance for a period of weaker inflation, not an imminent
The financial index’s 1.16 percent rise led the
gainers, with Bank of America, JPMorgan and
Citigroup all up more than 1 percent.
The consumer discretionary index rose 0.9 percent,
helped by a gain in Walt Disney, Comcast and
At 10:57 a.m. ET (1457 GMT), the Dow Jones Industrial
Average was up 126.57 points, or 0.59 percent, at
21,437.23, the S&P 500 was up 18.26 points, or 0.75
percent, at 2,437.64.
The Nasdaq Composite was up 54.76 points, or 0.89
percent, at 6,201.38.
With investors awaiting second-quarter corporate earnings,
equity valuations have come under focus at a time when
inflation remains low, recent economic data has been tepid and
President Donald Trump’s pro-growth policies face delays.
The S&P 500 is trading at nearly 18 times forward earnings
estimates, well above its long-term average of 15 times.
“Valuations are certainly a little bit elevated and they are
a bit of a concern,” said Randy Frederick, vice president of
trading and derivatives for Charles Schwab in Austin, Texas.
“We saw valuations run up in the first quarter but then when
earnings came out they were pretty solid so ultimately if
earnings continue at the rate we’ve seen recently, then those
valuations will be fine.”
Federal Reserve Chair Janet Yellen said on Tuesday that by
standard metrics, some asset valuations look high while Vice
Chair Stanley Fischer warned that central bank must remain
vigilant in monitoring financial stability risks.
San Francisco Fed head John Williams said investors may be
getting overly complacent about risks and that “the stock market
seems to be running pretty much on fumes.”
Meanwhile, Trump administration’s ability to deliver on
election promises came under focus on Tuesday after a planned
vote on Republican healthcare bill to dismantle the Affordable
Care Act was put off to after the Senate’s July 4 recess.
The healthcare legislation is the first plank of President
Trump’s domestic policy agenda, with investors eager for him to
move onto his other plans, including tax cuts and infrastructure
Oil prices rose about 1 percent but concerns remained that a
three-year supply glut is far from over.
KB Home was up 3.2 percent at $23.54 after the
homebuilder increased its full-year forecast.
General Mills rose 2.3 percent to $56.81 after the
Cheerios maker’s quarterly profit beat estimates.
Advancing issues outnumbered decliners on the NYSE by 2,263
to 516. On the Nasdaq, 2,016 issues.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)