U.S. stocks rose in early Wednesday trade, with gains across nearly all sectors. Financials stocks, which closely track Treasury yields, were among Wall Street’s best performers.
The S&P 500 SPX, +0.65% was up 14 points, or 0.6%, at 2,433, with all of its 11 main sectors trading in positive territory. Financials were up 1.4%.
The yield on 10-year Treasurys TMUBMUSD10Y, +0.91% was up at 2.23%, having risen to a one-month high in the previous session. Higher long-term borrowing costs mean banks can earn bigger spread on their loans.
Volatility in technology stocks continued to limit gains, with the sector, measured by the Select Sector SPDR ETF XLK, +0.44% off 0.2% and threatening to end lower for a third straight session.
“Stocks are fairly valued and technology shares had done really well. Seeing dips in some of the highflying shares at this stage is healthy,” said Kim Forrest, senior analyst and portfolio manager at Fort Pitt Capital Group.
The Dow Jones Industrial Average DJIA, +0.57% gained 114 points, or 0.5%, to 21,425, with nearly all components trading higher. Shares of Walt Disney Co. DIS, +1.92% and J.P. Morgan Chase & Co. JPM, +1.03% led the charge.
The Nasdaq Composite Index COMP, +0.64% gained 8 points, or 0.2%, at 6,156, underperforming other indexes, but in the green.
“U.S. technology stocks have been very weak lately, both in absolute and relative terms…massive outperformance year-to-date is the segment’s biggest weakness,” said Peter Garnry, Saxo Bank’s head of equities strategy, in a note Wednesday. “Valuations are historically high in U.S. tech stocks, and sentiment has weakened fast over the past 24 hours.”
The three major indexes all fell Tuesday, after a delay to a vote on health-care bill prompted worries about the prospects for President Donald Trump’s pro-growth agenda.
The oil market will be in focus with the Energy Information Administration’s report on weekly crude supplies due at 10:30 a.m. Eastern Time. The American Petroleum Institute on Tuesday reported an unexpected weekly rise of 851,000 barrels in U.S. crude supplies.
U.S. oil futures CLQ7, -0.18% were slightly lower but holding above $44 a barrel. The yield on the benchmark 10-year Treasury TMUBMUSD10Y, +0.91% steadied after hitting on Tuesday its highest level since just after the Fed’s mid-June meeting.
The stock market also continued to digest Tuesday comments from Fed Chairwoman Janet Yellen who said asset valuations are somewhat rich by standard metrics. Meanwhile, Mario Draghi comments, interpreted has less supportive for stocks, in a Tuesday speech, which prompted a global jump in government bonds yields, but he attempted to tamp down interpretations of his comments as less accommodative.
Economic docket: An early look at U.S. trade patterns in May points to a small decline in the nation’s trade deficit. Also, the pending home-sales index from the National Association of Realtors slid 0.8%, marking the third-straight monthly decline. Economists had forecast a 0.5% rise.
Stocks in focus: General Mills Inc. shares GIS, +2.00% rose more than 1% after the food company posted fiscal fourth-quarter earnings and sales topped Wall Street’s estimates.
Monsanto Co. MON, +0.81% shares rose 0.9% after the agricultural products company reported fiscal third-quarter profit and sales that beat expectations.
Draghi, along with Bank of England Gov. Mark Carney and Bank of Japan Gov. Haruhiko Kuroda, will appear Wednesday in Sintra, Portugal, at the ECB Forum on Central Banking.