Banks lift S&P, Dow; Nasdaq weighed by Microsoft
By Shreyashi Sanyal (Reuters) - The S&P 500 and the Dow Jones Industrials Average rose on Wednesday, helped by upbeat housing data and a gain for bank stocks driven by rising Treasury yields, while the tech-heavy Nasdaq was weighed by a drop in Microsoft. The benchmark 10-year U.S.
By Shreyashi Sanyal
(Reuters) - The S&P 500 and the Dow Jones Industrials Average rose on Wednesday, helped by upbeat housing data and a gain for bank stocks driven by rising Treasury yields, while the tech-heavy Nasdaq was weighed by a drop in Microsoft.
The benchmark 10-year U.S. Treasury yield moved back above the symbolic 3 percent mark on Tuesday and hit its highest in four months on Wednesday, while two-year rates reached 2.8 percent, the highest in over a decade.
Rises in market interest rates tend to boost banks and the S&P financial sector rose 1.64 percent, lifted by a 2.6 percent increase in shares of JPMorgan & Chase. The KBW bank index was up 1.90 percent.
Also helping lift yields was data that showed U.S. homebuilding increased more than expected in August.
When yields are high, investors tend to favor bonds over defensive sectors such as utilities, consumer staples and real estate, which promise high dividends.
"The yield curve seems to be holding steady with the 10-year above 3 percent, which bodes well for the financial group and investors are seeing broader economic stability," said Terry Sandven, chief equities strategist at U.S. Bank Wealth Management in Minneapolis.
The Dow Industrials was about 0.6 percent away from a fresh record high after touching its highest since Jan. 29.
The technology sector dropped 0.50 percent, led by a 1.9 percent decline in Microsoft and a 0.2 percent decline in shares of Apple.
Microsoft on Tuesday raised its quarterly dividend by about 10 percent, but Morgan Stanley said the hike was below the company's 12-month trailing operating income growth.
Five of the 11 major S&P sectors were higher. The Dow Industrials was boosted by a 2.5 percent gain in Caterpillar and 1.7 percent rise in Boeing.
But the utilities fell 1.71 percent, the most among the 11 major S&P sectors.
At 12:49 a.m. ET the Dow Jones Industrial Average was up 191.94 points, or 0.73 percent, at 26,438.90, the S&P 500 was up 2.79 points, or 0.10 percent, at 2,907.10 and the Nasdaq Composite was down 31.21 points, or 0.39 percent, at 7,924.90.
U.S.-China trade spat continues to weigh on the minds of analysts and investors but the broad conclusion from this week's exchange of blows was that China may be running out of options, given how much less it imports from the United States.
"We are not currently at a trade escalation, we are at status quo," said Art Hogan, chief market strategist at B. Riley FBR in New York.
Goldman Sachs was up 2.5 percent, after Reuters reported that the company was in advanced talks with several financial companies to spin off its app, which sells complex financial products to retail investors.
Copart Inc tumbled 16.5 percent, the most on the S&P, after the online vehicle auction company fell short of profit estimates, hurt by higher costs from the impact of Hurricane Harvey.
Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and no new lows, while the Nasdaq recorded 44 new highs and 38 new lows.
(Reporting by Shreyashi Sanyal in Bengaluru; editing by Sriraj Kalluvila and Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.