Wall Street edges higher, supported by banks, telecoms

By Lewis Krauskopf

(Reuters) - Wall Street edged higher on Tuesday as telecom stalwarts AT&T and Verizon gained and bank shares added to their torrid post-election rally.

The S&P financial sector <.SPSY> rose 0.7 percent, lifted by a 1.3 percent gain for Wells Fargo . The bank's chief executive told an investor conference it will see a near-term profit hit because of the sharp rise in interest rates, but will benefit in the longer term from rising interest rates.

Bank of America , Citigroup and Goldman Sachs also were higher.

Financial shares have climbed 15 percent since the November 8 election, with the sector particularly seen benefiting as President-elect Donald Trump is expected to seek economic stimulus and reduce corporate taxes and regulations.

 

While the "continued honeymoon of the Trump election" is supporting equities, so are recent positive economic data and corporate results from S&P 500 companies, which in the third quarter were poised to snap a streak of quarterly profit declines, said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

"Certain segments of the market seemed to benefit from the Trump election," Carlson said. "But I think the bigger input there on the bullish side was the fact that it looks like we are leaving the earnings recession and we have entered a period of earnings growth that I think can support the higher prices that we're seeing."

The Dow Jones industrial average <.DJI> rose 22.58 points, or 0.12 percent, to 19,238.82, the S&P 500 <.SPX> gained 5.99 points, or 0.27 percent, to 2,210.7 and the Nasdaq Composite <.IXIC> added 21.19 points, or 0.4 percent, to 5,330.08.

AT&T shares rose 1.8 percent, supplying the biggest boost for the S&P 500. The company said its new streaming television service DirectTV Now has so far exceeded expectations.

Verizon shares climbed 1.5 percent and also provided a significant boost to the benchmark blue-chip index. The No. 1 U.S. wireless carrier is selling 29 data centres to Equinix for $3.6 billion.

Verizon also helped boost the Dow, which has outperformed other major indexes since the election as investors pile into financials and industrial stocks.

Trump's market influence was seen on Tuesday as Boeing shares fell after he tweeted that the government should cancel an order with the plane maker to develop a revamped Air Force One. Boeing shares were down 0.1 percent in afternoon trading, having recovered most of their losses.

In other corporate news, Nike fell 2.8 percent to $50.38 after Cowen & Co downgraded the shoe and apparel maker's shares to "market perform."

Advancing issues outnumbered declining ones on the NYSE by a 2.35-to-1 ratio; on Nasdaq, a 2.14-to-1 ratio favoured advancers.

The S&P 500 posted 32 new 52-week highs and three new lows; the Nasdaq Composite recorded 250 new highs and 17 new lows.

(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila and Dan Grebler)