US stocks gain on debt deal hopes, bank share rally
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After opening tepidly, US stocks gained momentum throughout the day.
PHOTO: AFP
NEW YORK - Wall Street stocks rallied Wednesday on hopes for an agreement to avert a US debt default, while a reassuring update from a midsized bank boosted financial shares.
Although there is still no compromise to lift the nation’s so-called debt ceiling, US President Joe Biden said he was “confident” the country would not default, while Republican House Speaker Kevin McCarthy said he was “optimistic about our ability to work together.”
Markets continue to watch the talks.
“We’ve seen that many times before, it always gets resolved,” said LBBW’s Karl Haeling. “But the unknown factor is the politics of the hard-core Republican representatives.”
After opening tepidly, US stocks gained momentum throughout the day, with the Dow Jones Industrial Average finishing at 33,420.77, up 1.2 per cent.
The broad-based S&P 500 gained 1.2 per cent to 4,158.77, while the tech-rich Nasdaq Composite Index advanced 1.3 per cent to 12,500.57.
Analysts said the market was cheered by an update from Western Alliance Bancorporation, which said it had added US$2 billion (S$2.68 billion) in deposits so far in the second quarter.
Worries about deposit flight have slammed regional bank shares since early March. Western Alliance jumped 10.2 per cent, while Zions Bancorporation and Comerica International both won more than 12 per cent.
Big-box retailer Target added 2.5 per cent as it reported a dip in quarterly earnings, but pointed to progress in cutting excess inventory that has weighed on earnings in a slowing consumer economy.
Discount retail chain TJX climbed 0.9 per cent as it scored a 52 per cent increase in quarterly earnings to US$891 million. AFP
