MARKET SNAPSHOT: S&P 500 Posts Biggest One-day Gain In 2 Months As Financial Shares Rally

By Sue Chang and Anora Mahmudova, MarketWatch Features Dow Jones Newswires

Nasdaq Composite rallies as tech weakness abates

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A rally by financial and technology stocks on Wednesday helped lift U.S. equity indexes, with the S&P 500 posting its largest one-day gain in two months while Nasdaq Composite recorded its best day in eight months.

The large-cap index has been somewhat "fickle" this month with three of this year's biggest gains and two of its worst losses having occurred in June, according to Frank Cappelleri, executive director of Instinet.

The S&P 500 climbed 21.31 points, or 0.9%, to end at 2,440.69, its largest one-day gain since April 24. Financials led the gainers, rallying 1.6%, closely tracking rising long-term Treasury yields.

The yield on 10-year Treasurys was up at 2.22%, having risen to a one-month high in the previous session. Higher long-term borrowing costs mean banks can earn bigger spreads on their loans.

Technology stocks, which suffered a pullback in recent sessions, rebounded from lows, with the sector closing 1.4% higher.

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"Investors are encouraged by the likely eventual passage of a tax cut, combined with a projected pickup in U.S. economic growth and the expected outperformance of actual earnings growth versus estimates. Yet investors are held back by elevated valuations," said Sam Stovall, chief investment strategist at CFRA, in a note.

The Dow Jones Industrial Average gained 143.95 points, or 0.7%, to 21,454.61, with shares of Caterpillar Inc. (CAT)and J.P. Morgan Chase & Co. (JPM) leading the charge, up more than 2%.

The Nasdaq Composite Index rose 87.79 points, or 1.4%, to 6,234, recording its biggest one-day gain since Nov. 7.

Despite recent selloffs in technology stocks, the sector remains fairly robust, while some analysts aren't concerned about recent weakness.

"Stocks are fairly valued and technology shares had done really well. Seeing dips in some of the highflying shares at this stage is healthy," said Kim Forrest, senior analyst and portfolio manager at Fort Pitt Capital Group.

The small-cap Russell 2000 index jumped 1.6% to 1,425.27, closing less than a point below its all-time high close of 1,425.99.

All three main indexes erased Tuesday's losses (http://www.marketwatch.com/story/wall-street-stocks-on-track-to-slip-hurt-again-by-a-drop-for-techs-2017-06-27), which came after a delay to a vote on health-care bill, prompting worries about the prospects for President Donald Trump's pro-growth agenda.

Read:Politics may be tearing the country apart, but stocks are loving it (http://www.marketwatch.com/story/politics-may-be-tearing-the-country-apart-but-stocks-are-loving-it-2017-06-27)

U.S. oil futures added more than 1%, shrugging off data that showed crude supplies rose (http://www.marketwatch.com/story/oil-seesaws-as-eia-reports-modest-rise-in-us-crude-supplies-2017-06-28) by 100,000 barrels. The American Petroleum Institute on Tuesday reported an unexpected weekly rise of 851,000 barrels in U.S. crude supplies (http://www.marketwatch.com/story/oil-prices-fall-as-sources-say-api-data-show-an-unexpected-rise-in-us-crude-supply-2017-06-27). .

Economic docket: An early look at U.S. trade patterns in May pointed to a small decline in the nation's trade deficit. Also, the pending home-sales index from the National Association of Realtors (http://www.marketwatch.com/story/pending-home-sales-stumble-as-low-inventory-chokes-market-2017-06-28) slid 0.8%, marking the third straight monthly decline. Economists had forecast a 0.5% rise.

See: MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic).

Stocks in focus: Shares of Staples Inc (SPLS) soared 8.5% to $9.94 on news reports that Sycamore was nearing a deal to buy the office-supply chain for more than $10 a share.

General Mills Inc. shares (GIS) rose 1.6% after the food company posted fiscal fourth-quarter earnings and sales topped Wall Street's estimates. (http://www.marketwatch.com/story/general-mills-tops-earnings-and-sales-estimates-2017-06-28)

First Potomac Realty Trust(FPO) fell 0.3% after Government Properties Income Trust (GOV) reached a deal valued at $1.4 billion to buy the real-estate investment trust. (http://www.marketwatch.com/story/first-potomac-realty-trust-to-be-bought-in-a-14-billion-deal-by-government-properties-2017-06-28)

Monsanto Co.(MON) shares gained 1.3% after the agricultural products company reported fiscal third-quarter profit and sales that beat expectations.

Blue Apron Holdings Inc.'s IPO pricing will be set later Wednesday (http://www.marketwatch.com/story/blue-apron-needs-its-customers-to-eat-more-food-2017-06-27). The meal-kit maker has lowered its price range to $10 to $11 from a prior $15 to $17 range.

Other markets: The ICE Dollar Index , which measures the dollar against a basket of six currencies, was off 0.4% at 96.03. Gold futures edged up 0.2%.

Stock markets in Asia finished mostly higher and European stocks struggled at two-month lows.

--Carla Mozee contributed to this article.

(END) Dow Jones Newswires

June 28, 2017 16:37 ET (20:37 GMT)