The S&P 500 and the Dow Jones Industrials Average rose on Wednesday, helped by upbeat housing data and a gain for bank stocks driven by rising Treasury yields, while the tech-heavy Nasdaq was weighed by a drop in Microsoft. The benchmark 10-year US Treasury yield moved back above the symbolic 3 percent mark on Tuesday and hit its highest in four months on Wednesday, while two-year rates reached 2.8 percent, the highest in over a decade.
Rises in market interest rates tend to boost banks and the S&P financial sector rose 1.64 percent, lifted by a 2.6 percent increase in shares of J.P Morgan & Chase. The KBW bank index was up 1.90 percent. "The yield curve seems to be holding steady with the 10-year above 3 percent, which bodes well for the financial group and investors are seeing broader economic stability," said Terry Sandven, chief equities strategist at US Bank Wealth Management in Minneapolis.
The Dow Industrials was about 0.6 percent away from a fresh record high after touching its highest since January 29. The technology sector dropped 0.50 percent, led by a 1.9 percent decline in Microsoft and a 0.2 percent decline in shares of Apple. Microsoft on Tuesday raised its quarterly dividend by about 10 percent, but Morgan Stanley said the hike was below the company's 12-month trailing operating income growth.
Five of the 11 major S&P sectors were higher. The Dow Industrials was boosted by a 2.5 percent gain in Caterpillar and 1.7 percent rise in Boeing. But the utilities fell 1.71 percent, the most among the 11 major S&P sectors. At 12:49 am ET the Dow Jones Industrial Average was up 191.94 points, or 0.73 percent, at 26,438.90, the S&P 500 was up 2.79 points, or 0.10 percent, at 2,907.10 and the Nasdaq Composite was down 31.21 points, or 0.39 percent, at 7,924.90.
Goldman Sachs was up 2.5 percent, after Reuters reported that the company was in advanced talks with several financial companies to spin off its app, which sells complex financial products to retail investors.