US STOCKS-Wall Street surges as banks, tech stocks spark rebound

* S&P 500 nets best day in two months; Nasdaq best day since
Nov 7

* Bank stocks gain ahead of stress tests

* General Mills shares rise after quarterly earnings

* Indexes up: Dow 0.68 pct, S&P 0.88 pct, Nasdaq 1.43 pct
(Updates to close of U.S. markets)

By Lewis Krauskopf

June 28 (Reuters) – Wall Street rallied sharply on
Wednesday, with the S&P 500 scoring its biggest one-day
percentage gain in about two months, as financial and tech
stocks led a broad market rebound.

The Nasdaq posted its best session since Nov. 7, the day
before the U.S. presidential election.

The benchmark S&P had suffered its biggest one-day drop in
about six weeks on Tuesday after a healthcare bill was delayed
in the U.S. Senate.

The healthcare legislation is the first major plank of
President Trump’s domestic policy agenda, with investors eager
for him to move onto his other plans including tax cuts,
infrastructure spending and deregulation.

Investors may be reevaluating the impact of the Senate’s
delay on the market and Trump’s agenda, said Rick Meckler,
president of LibertyView Capital Management in Jersey City, New
Jersey.

“The market has had trouble really appreciating, but it has
had even more trouble declining,” Meckler said. “It seems like
any negative period is very quickly met with new buyers.”

“Interest rates are still very low and a lot of investors
see little opportunity to invest anywhere but in stocks,” he
added.

The Dow Jones Industrial Average rose 143.95 points,
or 0.68 percent, to 21,454.61, the S&P 500 gained 21.31
points, or 0.88 percent, to 2,440.69 and the Nasdaq Composite
added 87.79 points, or 1.43 percent, to 6,234.41.

The small-cap Russell 2000 ended up 1.6 percent.

Financials were the best performing S&P sector,
rising 1.6 percent.

Bank stocks including JP Morgan Chase and Bank of
America helped boost the S&P 500, both rising more than
2 percent. The interest rate-sensitive group was helped by an
increase in yields for 10-year Treasuries and by a widening
spread between shorter- and longer-dated U.S. bonds.

“We have had the statements from various Fed officials that
they are still on board with the tightening cycle and that has
been a big driver for finance names,” said Peter Jankovskis,
co-chief investment officer at OakBrook Investments LLC in
Lisle, Illinois.

The stocks were also rising ahead of stress test results
expected from the Federal Reserve that could pave the way for
the banks to return more capital to shareholders.

Tech stocks gained 1.3 percent, surging back from
their worst day in more than two weeks. The sector has led the
S&P 500’s 9-percent gain this year, but has pulled back recently
as some investors question whether the group is too expensive.

The tech-heavy Nasdaq bounced off its 50-day moving average.

With second-quarter corporate earnings set to begin in
earnest, investors are looking for results to support equity
valuations. The S&P 500 is trading at nearly 18 times forward
earnings estimates, well above its long-term average of 15
times.

In earnings news, General Mills shares rose 1.6
percent after the Cheerios cereal maker reported a
better-than-expected quarterly profit.

Staples shares rose 8.4 percent. The company will
announce its sale to private equity firm Sycamore Partners, a
person familiar with the matter said on condition of anonymity.

Advancing issues outnumbered declining ones on the NYSE by a
3.18-to-1 ratio; on Nasdaq, a 3.29-to-1 ratio favored advancers.

About 6.7 billion shares changed hands in U.S. exchanges,
below the 7.2 billion daily average over the last 20 sessions.
(Additional reporting by Kimberly Chin in New York and Tanya
Agrawal in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)


Leave a Reply