Banks lead Wall Street higher
NEW YORK — U.S. stocks rose on Tuesday as data pointing to higher inflation lifted financial shares while high-growth tech names attracted renewed attention.
The S&P financial sector index was the day’s biggest gainer, up 0.9 percent, though all cyclical sectors, which are tied to the pace of economic growth, outperformed for the day. E*Trade Financial was the S&P 500’s top gainer, up 7.7 percent at $22, while Charles Schwab Corp. climbed 5.5 percent to $27.30.
The Consumer Price Index rose 0.4 percent in May, the biggest gain in more than a year, pushing investors to sell some U.S. government debt. The yield on the 10-year Treasury note shot up as high as 2.65 percent.“Typically inflation accompanies economic growth, so this is a positive, especially with people looking for any reason to buy,” said Carl Kaufman, who helps manage $7 billion at the Osterweis Strategic Income Fund in San Francisco.About 5.61 billion shares traded on all U.S. platforms, according to BATS exchange data, above the month-to-date average of 5.36 billion.U.S. crude futures fell 0.5 percent to settle at $106.36 a barrel after President Barack Obama considered options for military action in response to a Sunni militant onslaught in Iraq. Market participants are closely monitoring the violence there, worried that it could lead to high oil prices for an extended period. Exxon Mobil Corp. fell 0.5 percent to $102.42.The Dow Jones industrial average rose 27.48 points or 0.16 percent, to end at 16,808.49. The S&P 500 gained 4.21 points or 0.22 percent, to 1,941.99. The Nasdaq Composite added 16.13 points or 0.37 percent, to 4,337.23.“Momentum” stocks, marked by hyper levels of growth and concerns about excessive valuation, gave the Nasdaq an outsized advance. Expedia Inc. rose 4.1 percent to $77.62 while Netflix Inc. added 3.1 percent to $443.65. Keurig Green Mountain gained 4.6 percent to $125.49; the stock has jumped 66.1 percent in 2014 so far.Shares of Adobe Systems Inc. rose 6.2 percent to $71.74 in after-hours trading after the software company reported its second-quarter results and gave a strong outlook.The Fed began its two-day policy meeting at 10 a.m. (1400 GMT) as scheduled and is widely expected to conclude with another $10 billion cut of its monthly bond purchases. Investors are also focused on whether officials will tip their hand on longer-term plans for interest rates.In other economic data released on Tuesday, housing starts and building permits fell more than expected in May.About 60 percent of stocks traded on the New York Stock Exchange closed higher for the day, while about 65 percent of Nasdaq-listed names ended in positive territory.