WALL STREET | Tech stocks recover, banks rise

June 14, 2017 - 1:21 AM
Wall street NYSE trading
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S. REUTERS/Brendan McDermid

U.S. stocks rose on Tuesday [US time], with the Dow hitting an all-time high as bank and technology shares gained.

The S&P 500 technology sector .SPLRCT rose 0.71 percent, recovering from its biggest two-day decline in nearly a year on Monday, and topped the list of gainers among the 11 major S&P indexes.

Shares of Microsoft (MSFT.O), Alphabet (GOOGL.O) and Apple APPL.O, which were hit hard by the rout, powered the technology index on Tuesday.

“The selloff in tech probably was a bit further than people expected, so there is some bargain hunting back into that sector,” said Rick Meckler, president of LibertyView Capital Management.

“I think the sector rotation could go on for a while.”

Investors are also likely to stay away from making big bets ahead of a near-certain interest rate hike from the Federal Reserve.

Traders have priced in a 94 percent chance of the Fed raising rates after its two-day meeting that starts on Tuesday. Investors are also looking for more details on the central bank’s plans to trim its $4.5 trillion balance sheet.

The Fed is expected to release its decision at 2:00 p.m. ET (1800 GMT) on Wednesday followed by a press conference by Fed Chair Janet Yellen. At 12:41 p.m. ET (1641 GMT), the Dow .DJI was up 84.08 points, or 0.4 percent, at 21,319.75, the S&P 500 .SPX was up 8.55 points, or 0.35 percent, at 2,437.94 and the Nasdaq Composite .IXIC was up 37.33 points, or 0.6 percent, at 6,212.80.

Six of the 11 major S&P sectors were higher, while defensive plays like utilities .SPLRCU, telecom services .SPLRCL and consumer staples .SPLRCS were lower.

Financials .SPSY rose 0.51 percent, helped by gains in big banks after the U.S. Treasury Department announced a plan to make sweeping changes to banking regulations on Monday.

The department proposed to reduce trading restrictions that the banks face, ease their annual stress tests, and curb the powers of the Consumer Financial Protection Bureau (CFPB).

“I think investors are unsure of real regulatory changes but this is enough talk to keep them interested,” Meckler said.

Amazon.com (AMZN.O) rose 0.7 percent, after recording losses for the past two days, and gave the biggest boost to the consumer discretionary index .SPLRCD.

Restaurant chain operator Cheesecake Factory (CAKE.O) was down nearly 10 percent at $52.61 after it warned of a decline in comparable store sales in the current quarter.

Tesla (TSLA.O) was up 2.5 percent at $368.17 after Berenberg raised its rating on the stock to “buy” from “hold”.

Advancing issues outnumbered decliners on the NYSE by 1,847 to 993. On the Nasdaq, 1,731 issues rose and 1,060 fell.