Wall Street stocks surge as banks, technology sectors spark rebound

WALL STREET stock rallied sharply on Wednesday, with the benchmark S&P 500 index scoring its biggest one-day percentage gain in about two months, as financial and technology stocks led a broad market rebound.

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

The S&P 500 had suffered its biggest one-day drop in about six weeks on Tuesday after a health care bill was delayed in the US Senate.

The health care legislation is the first major plank of President Donald J. 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 Mr. 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,” Mr. Meckler said.

“It seems like any negative period is very quickly met with new buyers,” he added.

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

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

The small- cap Russell 2000 ended up 1.60%.

Financials were the best performing S&P sector, rising 1.60%.

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

Bank stocks also were higher ahead of stress test results from the Federal Reserve and added to those gains in after-hours trading as the Fed approved plans from the 34 largest US banks to use extra capital for stock buybacks, dividends and other purposes.

Tech stocks gained 1.30%, surging back from their worst day in more than two weeks. The sector has led the S&P 500’s 9% 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 US corporate earnings reporting set to begin in earnest in July, investors are looking for results to support equity valuations.

The S& P 500 is trading at nearly 18 times forward earnings estimates, above its long- term average of 15 times.

In earnings news, General Mills shares rose 1.60% after the Cheerios cereal maker reported a better-than-expected quarterly profit.

Staples shares rose 8.40%. 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; on Nasdaq, a 3.29to-1 ratio favored advancers.

About 6.70 billion shares changed hands in US exchanges, below the 7.20 billion daily average over the last 20 sessions. —