Wall Street climbs as tech recovers, banks rise ahead of Fed

By Lewis Krauskopf

(Reuters) - Wall Street gained on Tuesday, with the Dow hitting an all-time high, as bank shares rose ahead of an expected Federal Reserve interest rate hike and technology stocks bounced back.

The S&P 500 technology sector <.SPLRCT> rose 0.7 percent, recovering from its biggest two-day decline in nearly a year. Big tech names, such as Microsoft and Facebook , pushed the S&P 500 higher.

"The selloff in tech probably was a bit further than people expected, so there is some bargain hunting back into that sector," said Rick Meckler, president of LibertyView Capital Management.

Tech has led the S&P 500's 9-percent rally this year, and its recent swoon has sparked speculation that investors may be rotating into other swaths of the market that have lagged in 2017, such as financials and energy.

 

Financials <.SPSY> were up 0.5 percent on Tuesday, while energy <.SPSY> gained 0.7 percent. Materials <.SPLRCM> were the top gaining sector, rising 0.9 percent.

Tuesday's market action reflected "a continuation of running up some of the areas that have not participated over the course of the last few months in combination with some speculation that the Fed is going to be more resolute about raising rates than investors had begun to anticipate in the bond market," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

The Dow Jones Industrial Average <.DJI> rose 88.48 points, or 0.42 percent, to 21,324.15, the S&P 500 <.SPX> gained 9.66 points, or 0.40 percent, to 2,439.05 and the Nasdaq Composite <.IXIC> added 33.89 points, or 0.55 percent, to 6,209.36.

Traders are overwhelmingly expecting an interest rate increase when the Fed concludes its two-day meeting on Wednesday.

The central bank is scheduled to release its decision at 2 p.m EDT (1800 GMT) on Wednesday with a news conference to follow from Fed Chair Janet Yellen.

Financials, which tend to benefit when rates are rising, also climbed after the U.S. Treasury Department announced a plan to upend the country's financial regulatory framework, which would grant many items on Wall Street's wishlist.

In corporate news, Cheesecake Factory shares fell 9.5 percent after the restaurant chain warned of a decline in comparable store sales.

Advancing issues outnumbered declining ones on the NYSE by a 2.11-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favoured advancers.

(Additional reporting by Sruthi Shankar and Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)