By Shreyashi Sanyal
(Reuters) - Wall Street rose on Friday after a bounce in technology and other high-growth stocks led a fight back from its worst two-day slide in eight months, while early gains from strong earnings of the biggest U.S. lenders faded.
PNC Financial led the losses among bank stocks with a 6.3 percent drop after the regional bank reported disappointing quarterly loan growth and said it expected only a small improvement in lending this quarter.
The S&P 500 banks index slid 1.65 percent, also weighed down by JPMorgan Chase & Co reversing early gains to trade down 1.8 percent despite its quarterly profit beating expectations.
The only gainers among banks were Citigroup, which rose 0.6 percent and Wells Fargo which eked out a 0.64 percent gain after upbeat results.
"Rising interest rates, higher yields and an accelerating economy sets the perfect environment for banks but the fact that they have underperformed the markets is a factor that has weighed," said Aaron Clark, portfolio manager at GW&K Investment Management in Boston.
Netflix, Amazon and Apple — some of the names that took a hit from an erratic selloff this week — rose between 1.9 percent and 5 percent.
The S&P 500 technology index rose 1.77 percent, providing the biggest boost to the S&P 500.
"The past few days were a bit of a wake-up call, but it also created an opportunity for those who have been missing out to buy some of these high-growth technology names," said Jason Browne, chief investment strategist at FundX Investment Group in San Francisco.
The bank results launch a quarterly reporting season that will give the clearest picture yet of the impact on profits from President Donald Trump's trade war with China.
Earnings at S&P 500 companies are estimated to have risen 21.5 percent in the third quarter, according to I/B/E/S data from Refinitiv, a slowdown from the previous two quarters.
At 1:33 p.m. ET the Dow Jones Industrial Average was up 56.52 points, or 0.23 percent, at 25,109.35, the S&P 500 was up 12.26 points, or 0.45 percent, at 2,740.63 and the Nasdaq Composite was up 88.23 points, or 1.20 percent, at 7,417.29.
Energy stocks fell 0.80 percent as oil prices dropped after the International Energy Agency (IEA) deemed supply as adequate and the outlook for demand weakening.
Among the major gainers were the consumer discretionary and communication services sectors, which rose 1.20 percent and 1.15 percent, respectively.
The two sectors, along with tech, house the high-growth FAANG group. Amazon, Apple, Netflix and Alphabet were trading higher between 1.4 percent and 5 percent.
Facebook, however, gave up early gains to trade 0.4 percent lower. The company confirmed that a security breach announced late last month gave attackers access to about 30 million accounts, of which name and contact details were stolen of 29 million people.
Declining issues outnumbered advancers for a 1.12-to-1 ratio on the NYSE. Advancing issues outnumbered decliners for a 1.23-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 49 new lows, while the Nasdaq recorded eight new highs and 197 new lows.
(Reporting by Shreyashi Sanyal; Additional reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham and Shounak Dasgupta)
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Updated Date: Oct 13, 2018 00:06 AM