NEW YORK: Wall Street was higher on Wednesday, extending gains from Tuesday, as the possibility of the US Federal Reserve raising interest rates as early as this summer boosted bank stocks.
Financial stocks were up 1.26%, hitting their highest levels since the beginning of the year. Bank of America, JPMorgan and Citigroup were all up between 2% and 3%.
Comments from policymakers in recent days have raised expectations of a rate hike in June, much sooner than previously thought.
Traders are now pricing in a 37.5% chance for a June rate hike, up from just 4 percent last week, according to CME Group’s FedWatch tool.
“Wall Street is getting a little bit more comfortable with a hike and knowing that the sun will rise even after the Fed hikes rates,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“The recent economic data suggests that the economy is better, but continues to be uneven.” Helping the day’s gains, energy shares also rose as oil prices hovered near US$50 a barrel for the first time in seven months on expectations of shrinking supply.
Oil major Chevron was up 1.31%.
At 11:07am ET (1507 GMT) the Dow Jones industrial average was up 167.65 points, or 0.95%, at 17,873.7, the S&P 500 was up 16.07 points, or 0.77%, at 2,092.13 and the Nasdaq Composite was up 34.65 points, or 0.71%, at 4,895.71.
The gains were broad-based with nine of the 10 major S&P sectors trading higher.
The S&P 500, which rose about 15 percent since its February lows, is up about 2% for year and has struggled for direction given ambiguity over the trajectory of interest rates and mixed economic data.
Fed speakers scheduled to speak later on Wednesday include Federal Reserve Bank of Philadelphia president Patrick Harker, Minneapolis Fed chief Neel Kashkari and Dallas Fed chief Robert Kaplan.
Shares of Computer Sciences soared 34.5% to US$47.90 after Hewlett Packard Enterprise said it would spin off and merge its struggling IT services business with the company. Hewlett Packard Enterprise was up 9.8% at US$17.84.
Alibaba Group was down 3.4% at US$78.40 after the company said it was being investigated by the US SEC over whether its accounting practices violated any federal laws.
Yahoo, in which Alibaba own a stake, was down 2.2% at US$36.68.
Advancing issues outnumbered decliners on the NYSE by 2,099 to 766. On the Nasdaq, 1,881 issues rose and 736 fell.
The S&P 500 index showed 33 new 52-week highs and no new lows, while the Nasdaq recorded 76 new highs and 11 new lows. - Reuters