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Thursday June 24th, 2021 7:26AM

Stocks rise on broad gains driven by banks, tech companies

By The Associated Press

Stocks rose in afternoon trading on Wall Street Friday with technology companies and banks leading the way higher.

The broad gains, if they hold, could help the major indexes avoid a second weekly loss. The market has been churning because of a tug-of-war between hopes for economic growth and concerns about rising inflation stunting that growth.

The S&P 500 index rose 0.8% as of 12:49 p.m. Eastern. The Dow Jones Industrial Average rose 229 points, or 0.7%, to 32,848 and the Nasdaq rose 0.5%.

Technology stocks were the biggest gainers in the early going. The sector, which drove gains throughout pandemic, has been choppy recently because investors have been shifting money into stocks that are poised to benefit more from a growing economy. Cisco Systems rose 2.8% and Texas Instruments rose 3.6%.

Banks made strong gains after the Federal Reserve said it would lift limits on the dividends banks can pay and the share buybacks they can make. The sector is also getting a boost as bond yields rise again after a brief pause. Citigroup rose 1% and Bank of America rose 1.8%.

Higher bond yields allow banks to charge more lucrative interest on all kinds of loans and are also a signal that the economy is moving along with its recovery.

The yield on the 10-year Treasury note rose to 1.66% from 1.61% late Thursday. It surpassed 1.70% last week and has been raising some concerns about inflation, though most analysts expect a relatively modest rise in inflation as the economy grows.

Energy companies, which have been the biggest gainers so far in 2021, were given another boost as crude oil prices rose 4%. The OPEC oil cartel has been keeping supplies tight while demand continues to grow, helping to push oil prices higher. Hess rose 2.9%.

Investors brushed off a weak report on consumer spending for February, which was hampered by bad weather. The stumble is expected to be temporary following the recent round of stimulus which puts more money in people's pockets and could give spending a boost in the coming months.

That upturn in spending could already be playing out. Victoria’s Secret and Bath & Body Works owner L Brands jumped 5.2% after raising its first-quarter profit forecast, citing higher sales as stimulus checks reach people and COVID-19 restrictions are relaxed.

International markets also rose. Germany’s DAX rose 0.9%, the CAC 40 in Paris climbed 0.1% and Britain’s FTSE 100 rose 1%. Indexes in Asia also rose.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Utilities
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