Gains for bank stocks help lead major US indexes higher

A school group walks by the New York Stock Exchange, Tuesday, Feb. 23, 2021. Major indexes are off to a mixed start on Wall Street as gains for banks and industrial companies are offset by losses in Big Tech stocks like Apple and Amazon. The S&P 500 was down 0.2% in the first few minutes of trading Wednesday, a day after it narrowly managed to break a five-day losing streak. (AP Photo/Mark Lennihan)

Stocks shook off a weak start and closed broadly higher Wednesday, nudging the Dow Jones Industrial Average to another all-time high.

The S&P 500 rose 1.1% after having been down 0.6% in the early going. Gains in financial, technology and industrial stocks powered the comeback. Utilities fell.

U.S. Treasury yields continued to head higher. Bank stocks benefited from the latest upward move in yields, which will allow them to charge higher rates on mortgages and other loans, increasing their profits. JPMorgan Chase rose 1.8% and Bank of America added 2.4%.

The S&P 500′s technology sector accounted for a big share of the rally after declining for six straight days.

“(Stocks) are back in rally mode after spending the past few days trending sideways, digesting early year gains,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “On balance, we still think the glass is half full and (stocks) trend higher as we look to the end of the year.”

The S&P 500 index rose 44.06 points to 3,925.43. The Dow climbed 424.51 points, or 1.4% to 31,961.86, an all-time high. The Nasdaq Composite added 132.77 points, or 1%, to 13,597.97.

The Russell 2000, which tracks smaller companies, continued to outpace the rest of the market, as it has since the beginning of the year. That’s a sign investors are feeling more confident about economic growth. The index rose 53.07 points, or 2.4%, to 2,284.38.

Investors are still anticipating another round of stimulus to help boost the economy. The U.S. House of Representatives is likely to vote on President Biden’s proposed stimulus package by the end of the week. It would include $1,400 checks to most Americans.

The afternoon rebound followed Federal Reserve Chair Jerome Powell's appearance before Congress Wednesday. Powell said that the central bank will not begin raising interest rates until it believes it has reached its goals on maximum employment and inflation.

As he did before the Senate Banking Committee on Tuesday, Powell told the House Financial Services Committee that the Fed was in no hurry to raise benchmark short-term interest rates or to begin trimming its $120 billion in monthly bond purchases used to put downward pressure on longer-term rates.

Powell said the Fed did not see any indication that inflation could race out of control. While price increases might accelerate in coming months, Powell said those increases were expected to be temporary and not a sign of long-run inflation threats. Inflation has been nonexistent in the U.S. for the better part of a decade.

Treasury yields continued to climb Wednesday, adding to a multi-week increase in rates that are used as benchmarks for many kinds of loans. The yield on the 10-year Treasury note rose to 1.38%, the highest level in just over a year.

The rise in bond yields has several implications for both the stock market and overall economy. Higher yields make stocks with lofty valuations less attractive. Those tend to be technology companies, which are priced typically for growth and not for a steady return of dividends like mature companies like makers of consumer staples, utilities and real estate.

Despite the tech in rally stocks overall, some Big Tech companies fell Wednesday. Apple slid 0.4% and Amazon dropped 1.1%. Those and other Big Tech companies rocketed in 2020 as investors bet that the pandemic would cause Americans to shift shopping habits and buy gadgets to keep themselves occupied in pandemic quarantines.

Boeing jumped 8.1%, the biggest gainer in the Dow Jones Industrial Average, after shedding 2.5% over the prior two days in the wake of an engine malfunction over the weekend in a 777 aircraft operated by United Airlines.

The plane, which took off from Denver and was bound for Honolulu, was forced to make an emergency landing Saturday after a fan blade broke and pieces of the engine's casing fell on neighborhoods. Federal aviation regulators ordered the grounding of planes with the type of engine on the plane.

GameStop doubled in the last hour of trading in another burst of volatility. The video game retailer's stock shot up to $91.71. It was the stock's best day since January 27, when it more than doubled and closed at $347.51. Shares in AMC Entertainment jumped 18.1%. Both stocks have been hyped in recent weeks by people on social media forums at the expense of hedge funds that were betting these stocks would lose value.

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AP Economics Writer Martin Crutsinger contributed.