US STOCKS-Wall St jumps as tech, bank stocks rally

  • Reuters
  • Stock Market News
US STOCKS-Wall St jumps as tech, bank stocks rally
Credit: © Reuters.

* Twitter touches record low after brokerage downgrade
* Toll Brothers up on revenue beat
* New U.S. home sales touch 8-year high in April
* Indexes up: Dow 1.17 pct, S&P 1.25 pct, Nasdaq 1.71 pct

(Updates to early afternoon)
By Tanya Agrawal
May 24 (Reuters) - The S&P 500 and the Dow Jones industrial
average hit their highest in seven sessions on Tuesday, while
the Nasdaq closed in on a one-month high as technology and
financial stocks rallied.
Banking stocks .SPSY got a big boost as investors
speculated on the possibility of a June interest rate hike.
Bank of America (NYSE: BAC ) BAC.N and JPMorgan (NYSE: JPM ) JPM.N were up more
than 1.5 percent, while Citigroup (NYSE: C ) C.N jumped 2.2 percent.
Microsoft MSFT.O was up 2.9 percent and provided the
biggest boost to the Nasdaq and S&P 500, while Goldman Sachs'
GS.N 1.4 percent rise lifted the Dow.
Minutes of the Federal Reserve's April meeting released last
week suggested a June rate hike had not been ruled out,
surprising investors who had thought the Fed would stand pat
until the end of the year.
"I think investors are becoming more comfortable with an
early rate hike because even if the Fed does raise rates in
June, it will remain extremely accommodative," said Art Hogan,
chief market strategist at Wunderlich Securities in New York.
"I think the Fed wants to recalibrate the market's
expectations regarding a hike."
Several Fed officials struck hawkish tones in separate
speeches on Monday, calling for two-three rate hikes in 2016 if
supported by economic data.
Fed Chair Janet Yellen speaks on Friday.
Traders are now pricing in a 39 percent chance of a June
hike, up from 4 percent last week, as inflation creeps towards
the Fed's 2 percent target rate and the labor market
strengthens.
Data on Tuesday showed new U.S. single-family home sales
surged to a more than eight-year high in April and prices hit a
record high, offering further evidence of a pick-up in economic
growth.
The Philadelphia Housing Index .HGX climbed to a one-month
high after the data.
At 12:38 p.m. ET (1638 GMT) the Dow .DJI was up 204.46
points, or 1.17 percent, at 17,697.39, the S&P 500 index .SPX
was up 25.65 points, or 1.25 percent, at 2,073.69 and the Nasdaq
composite index .IXIC was up 81.53 points, or 1.71 percent, at
4,847.31.
The S&P rose above its 50-day moving average for the first
time in four days. The index has not closed above the closely
watched metric in almost two weeks.
The gains were broad-based, with all 10 S&P sectors in the
black. The technology index's .SPLRCT 1.84 percent rise led
the advance.
Oil reversed early losses to turn positive, as investors
awaited crude oil inventory data from the United States that was
expected to show a shrinking supply overhang. O/R
Toll Brothers TOL.N shares were up 8 percent at $29.26 as
the company's quarterly revenue beat expectations.
Herbalife (NYSE: HLF ) Ltd HLF.N jumped as much as 8.5 percent amid
conflicting reports on whether the company had reached an
agreement in principle with the U.S. Federal Trade Commission to
settle a probe into whether it runs a pyramid scheme.
Twitter TWTR.N fell as much as 4.8 percent to a record low
at $13.72 after brokerage MoffetNathanson downgraded the
company's stock to "sell" from "neutral".
Advancing issues outnumbered decliners on the NYSE by 2,263
to 687. On the Nasdaq, 2,100 issues rose and 596 fell.
The S&P 500 index showed 25 new 52-week highs and one new
low, while the Nasdaq recorded 75 new highs and 23 new lows.

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