Stocks - Wall Street Rides Financials Higher to Claw Back Losses

·2-min read

By Yasin EbrahimÂ - Wall Street clawed back losses on Wednesday as a surge in financials and industrials offset a fall in large-cap tech stocks and ongoing worries about escalating U.S.-China tensions.

The Dow Jones Industrial Average rose 1.36%, or 340 points, the S&P 500 gained 0.86%, while the Nasdaq Composite added 0.30%.

The rotation from growth to value continued on Wednesday, with financials leading the way, powered by bank stocks as reopening optimism has stoked hopes of a quicker economic recovery.

JPMorgan Chase (NYSE:JPM) rose about 4%, Goldman Sachs (NYSE:GS) was up more than 5% and Citigroup (NYSE:C) jumped 7%.

The optimism over the reopening of economies has coincided with growing hopes that a vaccine can be found sooner rather than later, with some, including President Donald Trump, touting year-end as a possible target.

Former Food and Drug Administration Commissioner Scott Gottlieb, however, said a publically availability vaccine is unlikely to arrive before 2021. Industrials also caught a bid on the back of a sharp uptick in General Electric (NYSE:GE) after the conglomerate said it would be selling its lighting division as part of ongoing restructuring efforts.

But technology lagged the rally, with investors seemingly wary of the frothy valuations on display following the sector's melt-up since the lows seen in March.

Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google-parent Alphabet (NASDAQ:GOOGL) traded below the flatline, though were well off their session lows.

Ahead of the open, the backdrop for the broader market was soured by escalating U.S.-China tensions. The U.S. has declared that Hong Kong is no longer autonomous following China's move to impose a national security law in the city, raising fears that U.S. sanctions on Beijing may soon follow.

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