U.S. Stocks Climb After Stumble

By Georgi Kantchev and Amrith Ramkumar Features Dow Jones Newswires

The Dow Jones Industrial Average rebounded from its worst session in weeks, boosted by shares of energy and financial companies.

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The Dow industrials rose 63 points, or 0.3%, to 21816, following the blue-chip index's largest one-day decline since Aug. 17 on Tuesday. The S&P 500 advanced 0.2% and the Nasdaq Composite swung between small gains and losses and was recently down 0.1%.

Strong economic data around the globe has underpinned stock markets this year, with U.S. indexes hitting record highs over the summer even as investors have grown anxious about how long the bull run can last.

"We remain overweight equities and don't think yesterday was a sign of things to come," said Jon Adams, senior investment strategist with BMO Global Asset Management. "Our bias has been to buy the dips," he said.

Energy stocks were among the best performers, rising alongside oil prices as Gulf Coast refineries continued to restart following Hurricane Harvey, boosting demand. U.S. crude oil was recently up 1%.

The S&P 500 energy sector climbed 1.5%, with Chevron and Exxon Mobil among the biggest gainers in the Dow industrials.

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Financial stocks bounced back from their worst day since mid-May, with the KBW Nasdaq Bank Index, a measure of 24 of the largest U.S. bank stocks, recently up 0.3%.

Shares of financial firms fell a day earlier after Federal Reserve governor Lael Brainard said the U.S. central bank should be cautious about raising short-term interest rates further until policy makers are confident of overcoming the "persistent failure" to reach 2% inflation. Higher rates tend to boost lending profitability.

Stocks slightly pared earlier gains Wednesday and Treasury yields fell after Fed Vice Chairman Stanley Fischer announced his intention to resign, months before his term was set to expire.

A run of soft inflation data in the U.S. has been contributing to a two-month decline in Treasury yields. On Wednesday, the yield on the 10-year U.S. Treasury note fell to 2.065%, according to Tradeweb, after closing at 2.072% Tuesday, its lowest level since November. Yields fall as prices rise.

Investors were tracking Hurricane Irma, which has grown into one of the most powerful storms ever recorded over the Atlantic Ocean, prompting evacuations in Florida and disrupting air and sea travel.

Shares of cruise-line operators and airline companies were among the market laggards Wednesday. Royal Caribbean Cruises fell 1.1%, while Carnival shares shed 0.6%. United Continental Holdings shares declined 2.3% after the company said Hurricane Harvey and price competition will weigh on revenue in the current quarter.

Continuing tensions following North Korea's recent nuclear test -- its most powerful yet -- were also a concern for investors. North Korea issued a defiant response on Tuesday to U.S. attempts to impose new sanctions, declaring that it wasn't cowed by the Trump administration's warnings and hinting at an unspecified "counteroffensive."

"While the [market] outlook is generally positive, there are a lot of risk factors out there," said Richard Benson, co-head of portfolio investments at Millennium Global Investments. "I'm positive but worried."

The Stoxx Europe 600 rose less than 0.1%. Many investors were looking ahead to the next monetary policy meeting of the European Central Bank on Thursday.

Most expect the ECB to hold off until next month to announce the start of winding down its EUR2.3 trillion ($2.7 trillion) stimulus program. But investors were awaiting comments by ECB President Mario Draghi, who is expected to offer clues about the stimulus phaseout.

In Hong Kong, the Hang Seng Index -- among the world's best-performing stock benchmarks this year -- finished down 0.5%, while Japan's Nikkei Stock Average fell 0.1%.

Write to Georgi Kantchev at georgi.kantchev@wsj.com

(END) Dow Jones Newswires

September 06, 2017 11:58 ET (15:58 GMT)