U.S. Stocks Climb, Led by Financials, Tech
May 24 2016 - 11:08AM
Dow Jones News
By Riva Gold and Aaron Kuriloff
U.S. stocks rose Tuesday, boosted by gains in financial and
technology stocks.
The Dow Jones Industrial Average rose 200 points, or 1.2%, to
17694 and the S&P 500 climbed 1.1%.
Some investors said stocks were still absorbing recent
indications that the U.S. Federal Reserve may raise interest rates.
Rising rates are good for banks because they increase the gap
between what banks charge on loans and what they pay for deposits,
a spread known as the net interest margin.
Philadelphia Fed President Patrick Harker said Monday he could
"easily" see the U.S. central bank raising rates two to three times
this year, possibly as soon as June.
"I think the markets are coming to grips with the fact that the
Fed is going to raise interest rates, the world's not going to end,
and let's see who benefits," said Bob Doll, senior portfolio
manager at Nuveen Asset Management. "Financials are among those who
should benefit."
The KBW Nasdaq Bank Index of large U.S. commercial lenders rose
1.8%. Morgan Stanley climbed 2.1%, and J.P. Morgan Chase rose
1.9%.
The tech-heavy Nasdaq Composite added 1.5%, while technology
shares in the S&P 500 gained 1.6%. Western Digital rose 4.3%
and eBay climbed 2.5%
The Stoxx Europe 600 reversed early losses to rise 2.2%.
Eurozone finance ministers were meeting Tuesday to discuss
options for Greek debt relief, after the country's parliament
approved taxes and austerity measures over the weekend needed to
unlock further rescue loans.
"For once, there's good news on Greece," said Mike Bell, global
market strategist at J.P. Morgan Asset Management, noting investor
sentiment was lifted by hopes that Greece will receive relief
before major debts fall due in July.
In currencies, the euro slipped 0.6% against the dollar to
$1.1151. German economic growth accelerated at the start of the
year, data showed Tuesday, but a separate report from German think
tank ZEW showed financial analysts grew more pessimistic about the
country's economic outlook.
The dollar rose 0.6% against the yen to Yen109.942. Japan's
finance minister said Tuesday that the country has no plans to
weaken the yen to try to boost exports, following weeks of market
speculation.
The British pound rose 0.8% against the dollar to $1.4600 after
an opinion poll pointed to a lower chance of the U.K. voting to
leave the European Union in a June 23 referendum.
"The pound has had a little jump for joy on fact that Brexit
risk is reducing, but sterling could fall quite a bit more if
Britain left [the EU]," Mr. Bell said.
Shares in Asia mostly ended lower as oil prices fell and
investors continued to grapple with the prospect of higher U.S.
interest rates.
Japan's Nikkei Stock Average fell 0.9%, while the Shanghai
Composite Index fell 0.8%. Hong Kong's Hang Seng Index added
0.1%.
U.S. crude oil added 1% to $48.56 a barrel. Gold fell 1.4% to
$1,234.50 an ounce.
Ian Talley contributed to this article
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 24, 2016 10:53 ET (14:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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