U.S. Stocks Led Higher by Financial Companies
June 28 2017 - 01:40PM
Dow Jones News
By Riva Gold
Shares of financial companies led U.S. stocks higher Wednesday,
as major indexes rebounded from their worst session in weeks.
The Dow Jones Industrial Average rose 153 points, or 0.7%, to
21464, following its biggest daily drop in more than a month. The
S&P 500 gained 0.9% and the tech-heavy Nasdaq Composite added
1.2% coming off its biggest one-day percentage drop since June
9.
Financial stocks led gains in the S&P 500, rising 1.6%.
Investors' shifting expectations for the course of monetary
policy in Europe drove some of the day's biggest moves.
Investors have sold government bonds this week amid worries
their value might fall if the European Central Bank starts reducing
its massive bond-buying program sooner than expected. But investors
were reassessing a Tuesday speech by European Central Bank
President Mario Draghi that many interpreted as suggesting that the
bank might start winding down its stimulus program in response to a
pickup in the eurozone economy.
The yield on the 10-year Treasury note was recently 2.221%,
according to Tradeweb, compared with 2.198% Tuesday. Yields on
10-year German bunds were at 0.366%, down from as high as 0.406%
earlier in the day but well above where they started the week.
Yields rise as prices fall.
The euro gyrated and was recently up 0.4% at $1.1380, following
media reports suggesting the ECB thought market participants
over-interpreted Tuesday's speech.
Also Wednesday, Bank of England Gov. Mark Carney said interest
rates in the U.K. may need to rise if the economy keeps
improving.
The pound jumped 1% to $1.2935, weighing on the export-heavy
FTSE 100, which fell 0.6%. The Stoxx Europe 600 was little
changed.
Technology shares rebounded and were recently up 0.9% in the
S&P 500. Tech has been the index's best-performing sector this
year, but is down more than 1% this month.
"Everybody remembers the [year] 2000 slipping of the tech
sector," said Jae Yoon, chief investment officer at New York Life
Investment Management. "But I have no concerns about tech
valuations," he said, noting that in terms of price-to-earnings
metrics, the sector is trading much closer in line to the S&P
500 than it did at its peak.
Japan's Nikkei Stock Average fell 0.5% but higher sovereign-debt
yields supported shares of Japanese insurers, which are heavy
buyers of such securities.
Amrith Ramkumar and Ese Erheriene contributed to this
article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
June 28, 2017 13:25 ET (17:25 GMT)
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