U.S. stocks gained on Tuesday as the financial sector got a lift from brokers' comments on banks, while minutes from the Federal Reserve's last meeting eased concerns over interest rates.
The minutes suggested the central bank could keep rates at ultra-low levels for even longer than investors anticipate if the economic outlook worsens. Investors worry that raising rates too soon could choke off the still fragile recovery.
The Fed feels it has enough leeway that they don't have to start the (tightening) process right now, said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia,
I think the interpretation is rates are going to stay low and that's giving the impetus to the market to move higher. Couple that with what appears to be continued healing ... and it seems that at least right now, it's the best of all worlds.
Rising bank shares buoyed the S&P 500 as Wells Fargo Securities raised its recommendation on large-cap U.S. banks by a notch to market weight, citing positive economic data,
Credit Suisse increased its price target on two smaller banking companies, Regions Financial Corp
Regions Financial gained 5.7 percent to $8.66, while Synovus Financial was up 5.9 percent at $3.61. The KBW regional banks index <.KRX> hit a 52-week intraday high at 56.01 and was up 3.4 percent.
The Dow Jones industrial average <.DJI> added 6.27 points, or 0.06 percent, to 10,979.82. The Standard & Poor's 500 Index <.SPX> rose 3.40 points, or 0.29 percent, to 1,190.84. The Nasdaq Composite Index <.IXIC> gained 11.52 points, or 0.47 percent, to 2,441.05.
The Nasdaq garnered support from Amazon.com
Home builders' stocks slid as rising Treasury yields stirred the specter of higher mortgage rates, which would make homes less affordable. Shares of KB Home
The 10-year Treasury note's yield has risen about 30 basis points over a two-week period, reaching 4 percent in intraday trade on Monday, although it finished at 3.99 percent.
Also limiting the advance were worries over Greece's fiscal situation after a report that Greece's government wants to bypass an International Monetary Fund financial safety net proposal on concerns that the IMF could impose tough conditions. A Greek finance ministry source denied the report.
An explosion at a West Virginia coal mine owned by Massey Energy
(Reporting by Leah Schnurr; Editing by Jan Paschal)