* S&P 500 on pace for best day in two months
* Bank stocks gaining ahead of stress tests
* General Mills shares rise after quarterly earnings
* Indexes up: Dow 0.67 pct, S&P 0.85 pct, Nasdaq 1.17 pct
(Updates to late afternoon)
By Lewis Krauskopf
June 28 (Reuters) – The S&P 500 on Wednesday was on pace for
its biggest one-day percentage gain in about two months as
financial and tech stocks led a broad market rebound.
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 their assessment of 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
The Dow Jones Industrial Average rose 142.36 points,
or 0.67 percent, to 21,453.02, the S&P 500 gained 20.47
points, or 0.85 percent, to 2,439.85 and the Nasdaq Composite
added 71.94 points, or 1.17 percent, to 6,218.56.
Financials were the best performing sector, rising
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.
The stocks were also rising ahead of stress test results
expected later in the day from the Federal Reserve that could
pave the way for the banks to return more capital to
Tech stocks gained 1 percent, bouncing 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 Nasdaq was posting its second-best day of the month, as
the tech-heavy index 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
In earnings news, General Mills shares rose 2.1
percent after the Cheerios cereal maker reported a
better-than-expected quarterly profit.
Advancing issues outnumbered declining ones on the NYSE by a
4.14-to-1 ratio; on Nasdaq, a 3.48-to-1 ratio favored advancers.
(Additional reporting by Kimberly Chin in New York and Tanya
Agrawal in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)