Bank Stocks Surge Again, Leading Broader Market Higher

NEW YORK (AP) -
FILE - This Jan. 4, 2010 file photo shows an entrance to a Wall Street subway station in New York. (AP Photo/Mark Lennihan, File)
FILE – This Jan. 4, 2010 file photo shows an entrance to a Wall Street subway station in New York. (AP Photo/Mark Lennihan, File)

U.S. stocks are rising Thursday as banks resume a steep upward climb. Federal Reserve Chair Janet Yellen emphasized that the Fed plans to raise interest rates, which will help banks make more money from lending. Consumer companies are also rising, but companies that make and sell food and household goods are lagging the market after Wal-Mart and Smucker announced disappointing sales.

KEEPING SCORE: The Dow Jones industrial average added 15 points, or 0.1 percent, to 18,883 as of 12:20 p.m. Eastern. The Standard & Poor’s 500 index rose 10 points, or 0.5 percent, to 2,186. The Nasdaq composite added 35 points, or 0.7 percent, to 5,329.

FED FOCUS: Yellen testified before Congress again that the Fed is more likely to raise interest rates soon. Yellen said the U.S. economy is improving and added that if the Fed keeps waiting now and later raises rates too quickly, that increases the risk of a recession. The Fed is widely expected to raise rates when it meets in mid-December.

Bond prices slipped. The yield on the 10-year U.S. Treasury note rose to 2.26 percent from 2.22 percent. Bond yields rise when investors expect higher interest rates and inflation.

BANKS ASCEND: Banks built on their huge climb last week. Bank of America gained 42 cents, or 2.1 percent, to $20.17. Citigroup rose $1.26, or 2.3 percent, to $55.89 and PNC Financial Services climbed $2.49, or 2.3 percent, to $110.

The S&P 500 financial sector index is at its highest level since before the financial crisis as investors hope that policies of President-elect Donald Trump will help banks make more money by encouraging economic growth and inflation and cutting regulations.

BEST BUYING: Greater sales of mobile phones and increased online sales helped electronics retailer Best Buy post a strong third quarter, and the company forecast a larger fourth-quarter profit than analysts had expected. The stock climbed $4.56, or 11.3 percent, to $45.01. Other retailers also rose. Home Depot recovered some recent losses and added $2.51, or 2 percent, to $127.84. Amazon also gained ground as Wal-Mart struggled. It picked up $10.26, or 1.4 percent, to $756.75.

WAL-MART HITS A WALL: Wal-Mart announced disappointing sales in its third quarter. The retailer’s profit also fell as it invested more money in its stores and its online business. The stock lost $2.87, or 4 percent, to $68.52. Warehouse club operator Costco lost $1.85, or 1.2 percent, to $150.29 and grocery store chain Kroger slid 71 cents, or 2.1 percent, to $32.99.

CISCO, OH NO: Cisco Systems fell after its earnings forecast disappointed Wall Street. The seller of routers, switches, software and services forecast a smaller-than-expected profit for its second fiscal quarter. That canceled out a strong first-quarter report. The stock gave up $1.64, or 5.2 percent, to $29.94.

NICE, NETAPP: Data storage company NetApp jumped after it reported a bigger profit than analysts expected for the fiscal second quarter and gave a very strong outlook for the current quarter. The stock gained $2.51, or 7.2 percent, to $37.24.

OIL DEAL: Oil refining company Tesoro will buy Western Refining for $37.30 a share in stock, a deal the companies valued at $4.1 billion. The stock closed at $30.50 on Wednesday, and it jumped $6.95, or 22.8 percent, to $37.45. Tesoro shares rose $1.35, or 1.6 percent, to $87.09.

GOING HUNGRY: Jam and jellies maker J.M. Smucker disclosed weak sales and its stock shed $4.77, or 3.7 percent, to $125.18. Tyson Foods fell $2.77, or 4 percent, to $65.25.

DOLLAR KEEPS RISING: Higher interest rates also means a stronger dollar, and the dollar rose to 109.3 yen from 109.15 yen. The euro fell to $1.0656 from $1.0681. The ICE U.S. dollar index continued to rise. It’s at its highest level in 13 years.

OIL: Benchmark U.S. crude picked up 46 cents, or 1 percent, to $46.03 a barrel in New York. Brent crude, which is used to price international oils, added 45 cents, or 1 percent, to $47.08 a barrel in London.

CLOUDY SKIES: First Solar, the biggest solar panel maker based in the U.S., fell after saying it will cut a quarter of its jobs. That’s around 1,600 positions. The company also said it will stop production at its only U.S. facility. The stock skidded $1.68, or 5.1 percent, to $31.14.

OVERSEAS: The FTSE 100 index of leading British shares added 0.7 percent and the CAC 40 in France rose 0.6 percent. Germany’s DAX gained 0.2 percent. Japan’s Nikkei 225 was flat and the Hang Seng index in Hong Kong eased 0.1 percent. The Kospi in South Korea inched higher.