FILE- In this April 5, 2018, file photo, a pedestrian passes the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Friday, June 29. (AP Photo/Richard Drew, File)

Big bank rally leads US stocks higher as 2nd quarter ends

June 29, 2018 - 2:46 pm

NEW YORK (AP) — U.S. stocks are rising Friday, and banks are rallying after the Federal Reserve approved their plans to pay bigger dividends and buy back billions of dollars in stock. Nike is surging after it reported strong results in its latest quarter including improved sales in North America. Technology and consumer-focused stocks are leading the way once again as the second quarter concludes.

KEEPING SCORE: The S&P 500 index jumped 17 points, or 0.6 percent, to 2,733 as of 2:40 p.m. Eastern time. The Dow Jones Industrial Average gained 206 points, or 0.9 percent, to 24,422. The Nasdaq composite rose 41 points, or 0.6 percent, to 7,545. The Russell 2000 index of smaller-company stocks gained 4 points, or 0.3 percent, to 1,649.

BANK ON IT: The Federal Reserve allowed 32 of the 35 largest banks in the U.S. to raise their quarterly dividends and buy back more stock. The central bank determined that those institutions are in good enough financial shape to weather a major downturn in the economy.

Wells Fargo surged 4.3 percent to $55.95. The Fed's approval is a notable win for Wells because earlier this year the Fed ordered the bank to replace several of its directors and limited its growth in response to abusive practices including opening accounts in consumers' names without permission. Those actions duped consumers out of millions of dollars.

Wells Fargo admitted to those practices in 2016 and has since agreed to pay more than $1.5 billion in fines, penalties and legal settlements.

Other banks also rose. Citigroup added 1.1 percent to $67.61. Goldman Sachs and Morgan Stanley, which weren't allowed to boost their dividends and repurchases, lagged behind. Goldman fell 0.3 percent to $222.71 and Morgan Stanley dipped 0.9 percent to $47.86.

JUST DID IT: Nike is on track for its biggest gain since September 2014 after its fourth-quarter profit and sales blew past Wall Street forecasts. The company said revenue in North America grew after several quarters of declines, and the company said it will buy back $15 billion in stock over the next four years. It gained 11.8 percent to $80.17.

QUARTER WRAP UP: From April to June, stocks have been buffeted by rising worries about trade disputes between the U.S. and China as well as the European Union, Mexico, and Canada. On Friday Canada announced $12.6 billion in retaliatory tariffs on U.S. goods in response to the U.S. tariffs on steel and aluminum imports.

With trade tensions in focus, stocks didn't make big gains after a very strong round of first-quarter corporate reports. The S&P 500 is up 3.5 percent since the beginning of April after it took a small loss in the first quarter and the Dow industrials are up 1.3 percent.

However the Nasdaq has jumped almost 7 percent and the Russell is up nearly 8 percent, and both recently hit record highs, as investors felt technology companies and smaller, U.S.-focused companies were safe picks during the trade tensions.

ENERGY: Energy companies and oil prices continued to climb. Benchmark U.S. crude gained 1 percent to $74.15 a barrel in New York. It's up 14 percent during the second quarter and trading at its highest price since late 2014. The S&P 500 index of energy companies has also gained 13 percent this quarter, far better than the rest of the market and its biggest gain in six and a half years.

Brent crude, used to price international oils, rose 1.9 percent to $79.09 a barrel in London.

Wholesale gasoline climbed 2.2 percent to $2.18 a gallon. Heating oil jumped 1.4 percent to $2.21 a gallon. Natural gas lost 0.5 percent to $2.92 per 1,000 cubic feet.

CONSUMER SPENDING: The Commerce Department said U.S. consumers increased their spending just 0.2 percent in May, a disappointing result after two months of much stronger gains. Inflation rose to its fastest pace in six years.

Still, companies that stand to benefit from faster economic growth fared better than the rest of the market Friday. That included retailers and technology companies, industrial firms and makers of chemicals and other basic materials.

TECH TIE-UP: High-tech contractor Synnex agreed to buy customer management company Convergys in a deal the companies valued at $2.8 billion, or $26.50 per share of Convergys. Synnex lost 8.2 percent to $98.01 and Convergys fell 2.5 percent to $24.74.

BONDS: Bond prices edged higher. The yield on the 10-year Treasury note fell to 2.83 percent from 2.84 percent.

METALS: Gold added 0.3 percent to $1,254.50 an ounce. Silver gained 1 percent to $16.20 an ounce. Copper fell 0.2 percent to $2.97 a pound.

CURRENCIES: The dollar rose to 110.85 yen from 110.64 yen. The euro rose to $1.1672 from $1.1555.

OVERSEAS: France's CAC 40 gained 1.1 percent and the German DAX added 0.9 percent after a deal on migration relieved pressure on the coalition government of Chancellor Angela Merkel. Britain's FTSE 100 added 0.3 percent.

Japan's benchmark Nikkei 225 edged 0.2 percent higher. South Korea's Kospi advanced 0.5 percent and Hong Kong's Hang Seng added 1.6 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay

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