Wall St climbs on energy, financials boost

US stocks have climbed, recovering from early declines on gains in energy and financial shares, but investors remain leery about the potential for another flare-up in the US-China trade war.

The financial sector was up 0.91 per cent on Wednesday, recouping all of the prior day's losses that came on a deepening of the US Treasury yield curve inversion, which often precedes a recession.

Gains in the benchmark S&P 500 index were also supported by a 1.40 per cent jump in energy stocks after industry data showed a fall in stockpiles of US crude, boosting oil prices, which settled up more than 1.5 per cent.

The two have been the worst performing of the 11 major S&P sectors in August.

Investors took some relief in the lack of new developments on the trade front although the US Trade Representative's office on Wednesday reaffirmed President Donald Trump's plans to impose an additional 5 per cent tariff on a list of $US300 billion ($A445 billion) of Chinese imports starting on September 1 and December 15.

"If you look at the sectors in terms of how the performance has lined up, it looks like people are coming back to having some belief in the economy," said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.

"It is sustainable but it depends a lot on what sort of announcements we have because realistically the economy is in pretty decent shape, it is just the concern is to the whole trade situation pulling the rug out from underneath it."

Next week, investors will look towards the monthly jobs report and manufacturing data which could guide expectations on the likelihood of another rate cut from the Federal Reserve at its mid-September meeting.

The Dow Jones Industrial Average on Wednesday rose 258.2 points, or 1 per cent, to 26,036.1; the S&P 500 gained 18.78 points, or 0.65 per cent, to 2,887.94; and the Nasdaq Composite added 29.94 points, or 0.38 per cent, to 7,856.88.

In another factor that could support stock prices, the 30-year US Treasury yield fell below that of the S&P 500 dividend yield, making equities a more attractive income alternative.

"Whether it is the Federal Reserve signalling more cuts in the future or just in general this rally in the bond market, but overall lower rates you would think put some sort of floor on the market as well," said Mark Kepner, equity trader at Themis Trading in Chatham, New Jersey.

Shares of Autodesk slid 6.74 per cent, as the worst performer on the S&P 500, after the company cut its full-year earnings forecast.

Shares of Tiffany & Co rose 3.02 per cent after the luxury jeweller reported quarterly earnings above analysts' estimates.

Advancing issues outnumbered declining ones on the NYSE by a 2.44-to-1 ratio; on the Nasdaq, a 2.31-to-1 ratio favoured advancers.

The S&P 500 posted 11 new 52-week highs and 38 new lows; the Nasdaq Composite recorded 26 new highs and 154 new lows.

About 5.81 billion shares changed hands in US exchanges compared with the 7.42 billion daily average over the last 20 sessions.

Austrlaian Associated PressBack to Breaking News

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