U.S. stocks rose, with technology and financial shares leading a rebound from the biggest drop in two months, amid optimism that progress is being made in Greece’s debt talks.
All 10 of the Standard & Poor’s 500 Index’s main industries climbed, with tech and financial companies up more than 1.4 percent. Intel Corp. and Microsoft Corp. added at least 1.8 percent. Citigroup Inc. and JPMorgan Chase & Co. gained more than 1.6 percent as financial shares hit a 2015 high. Energy and health-care advanced more than 1.1 percent.
The Standard & Poor’s 500 Index added 1.2 percent to 2,105.20 at 4:00 p.m. in New York, the biggest jump in a month. The gauge rose above its average prices for both the past 50 and 100 days. The Dow Jones Industrial Average advanced 236.36 points, or 1.3 percent, to 18,000.40 as all 30 members gained. The Nasdaq Composite Index climbed 1.3 percent.
“The Germans have officially blinked and off we go,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “U.S. data has been better in general, but more people are coming around to the fact the Fed is seeing all this volatility in the bond market and is afraid to raise rates, there isn’t too much tumult, oil has stabilized and so we move on.”
Optimism toward a potential Greek deal with its creditors rose as people familiar with Germany’s position said Chancellor Angela Merkel’s government may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds. A government spokesman denied that Germany is considering such a deal. The European Central Bank was also said to have raised the level of emergency cash available to Greek banks.
The S&P 500 fell on Monday to a two-month low before edging higher yesterday. The index had tumbled 2.4 percent from its May record amid concern the Federal Reserve will raise interest rates as early as September.
The benchmark this year has traded in its tightest weekly range since the mid-’90s, signaling investor uncertainty as to whether the economic recovery is strong enough to withstand a rate increase. Reports on retail sales and jobless claims Thursday may offer further clues.
“Incoming data will provide more evidence week by week that the world economy is not in a fragile state as some suspected in the first quarter,” said William Hobbs, head of investment strategy at Barclays Plc’s wealth-management unit in London. “Data seems to be pointing a bit upwards and that may be suggesting to some that revenue prospects for the U.S. corporate sector may get better than what was priced in.”
Economists see an almost 40 percent chance the Fed will delay raising rates beyond September if labor gains weaken or inflation fails to move higher, a Bloomberg News survey showed.
The Chicago Board Options Exchange Volatility Index fell 8.6 percent Wednesday to 13.22. The gauge, known as the VIX, posted its biggest two-day drop since May 8 after losing 5.4 percent Tuesday. About 6.5 billion shares traded hands on U.S. exchanges, 1.3 percent above the three-month average.
Intel jumped 1.8 percent to pace gains among chipmakers, rising for the first time in the eight sessions since announcing its acquisition of Altera Corp. Integrated Silicon Solutions Inc. agreed to merger terms with Cypress Semiconductor Corp., which rose 4.3 percent.
Analog Devices Inc. and Skyworks Solutions Inc. climbed at least 3 percent. Qorvo Inc. added 3.1 percent as it is set to join the S&P 500 after Thursday’s close. Also bolstering the tech sector Wednesday, Apple Inc. increased 1.2 percent, while Facebook Inc. and International Business Machines Corp. climbed more than 1.8 percent.
Banks added to Tuesday’s gains as the yield on the U.S. 10-Year Treasury hit its highest since September. Higher yields help banks’ profitability in lending. Citigroup and Bank of America Corp. climbed more than 1.6 percent, with Citi closing at its highest level in more than six years.
Insurance companies rose the most among 24 industry groups in the S&P 500, as they also benefit from higher bond yields. Insurers’ 2.2 percent gain was the strongest in four months, and sent the group to its highest in seven years. Prudential Financial Inc., American International Group Inc. and MetLife Inc. all added at least 2.8 percent. AIG hit its highest level since Oct. 2008.
Energy shares had their strongest increase in a month, up 1.2 percent as oil futures hit a 2015 high. Chevron Corp. rallied 1.4 percent, while Halliburton Co. and Devon Energy Corp. gained at least 2.1 percent.
Amazon.com Inc. and Walt Disney Co. rose more than 1.2 percent, while Netflix Inc. climbed 3.7 percent to lead the rally in consumer discretionary shares. Netflix reached a fresh record after investors approved a proposal that paves the way for a stock split, and a deal was announced offering the video service in Marriott Hotels.
Sears Holdings Corp. lost 12 percent, extending a four-day slide to a four-month low. Shares have fallen 26 percent since June 3, hurt by concerns that selling a chunk of its stores will leave less value for investors.
H&R Block Inc. fell 5.2 percent, the most in the S&P 500 and the shares’ biggest drop in eight months. Credit Suisse downgraded the biggest U.S. tax preparer to neutral from outperform. The shares rose 2.3 percent yesterday after the company posted a third-straight year of higher revenue.