* Vote on healthcare bill delayed until next month
* ECB sources say stimulus withdraw over interpreted
* Spectranetics jumps after $2.16 bln Philips deal
* Indexes up: Dow 0.46 pct, S&P 0.43 pct, Nasdaq 0.18 pct
(Updates to open)
By Tanya Agrawal
June 28 (Reuters) – Wall Street opened higher as financial
stocks rose and euro zone central bank sources told Reuters 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 1.03 percent rise led the
gainers in a broad rally.
JPMorgan and Citigroup rose 1.2 percent,
boosting the S&P.
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.
Federal Reserve Chair Janet Yellen said on Tuesday the
central bank would continue raising rates gradually and that by
standard metrics, some asset valuations look high.
Fed Vice Chair Stanley Fischer warned the 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.”
A planned vote on Republican healthcare bill to dismantle
the Affordable Care Act was put off to after the Senate’s July 4
The healthcare legislation, which has encountered resistance
from several Republicans, is the first plank of President Donald
Trump’s domestic policy agenda, with investors eager for him to
move onto his other plans, including tax cuts, infrastructure
spending and deregulation.
Trump’s promises of a pro-growth agenda is partly behind the
S&P’s 13 percent rise since the Nov. 8 election.
“A setback for health reform could put in question tax
reform this year unraveling the ‘Hope Rally'”, Peter Cardillo,
chief market economist at First Standard Financial.
At 9:41 a.m. ET (1341 GMT), the Dow Jones Industrial Average
was up 98.89 points, or 0.46 percent, at 21,409.55, the
S&P 500 was up 10.51 points, or 0.43 percent, at
The Nasdaq Composite was up 11.02 points, or 0.18
percent, at 6,157.65.
The technology index, which has risen about 17 percent since
the start of the year, was the only laggard.
Investors, concerned with the sector’s lofty valuations,
have been shifting to defensive sectors.
Oil edged up but 0.2 percent but concerns remained that a
three-year supply glut is far from over.
Spectranetics jumped 26.2 percent to $38.40 after
Dutch healthcare company Philips agreed to buy the
company for $2.16 billion.
KB Home was up 1.8 percent at $23.28 after the
homebuilder increased its full-year forecast.
Advancing issues outnumbered decliners on the NYSE by 2,179
to 456. On the Nasdaq, 1,603 issues rose and 685 fell.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)