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Wall Street indexes rallied on Wednesday with help from financial stocks as investors eyed strong economic data and trade war fears took a back seat while the Nasdaq registered its third straight record closing high.

White House economic adviser Larry Kudlow said late in the trading day that U.S. President Donald Trump will meet French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau during a G7 summit this week.

While he said Trump is not backing down from the tough line he has taken on trade, the comments appeared to calm investors.

Earlier reports citing sources said U.S. officials were weighing an offer by China to import an extra $70-billion of American goods over a year as Beijing tries to defuse a potential trade war.

“The trade rhetoric has once again dialed back,” said Mona Mahajan, U.S. Investment Strategist, Allianz Global Investors, New York. “It’s the on-again off-again threat of protectionism. It’s off again.”

Trump last week pushed on with imposing tariffs – 25 per cent on steel and 10 per cent on aluminum – on Canada, the EU and Mexico, with Mexico retaliating by putting tariffs on American products such as steel, pork and bourbon.

The Dow Jones Industrial Average rose 346.41 points, or 1.4 per cent, to 25,146.39, the S&P 500 gained 23.55 points, or 0.86 per cent, to 2,772.35 and the Nasdaq Composite added 51.38 points, or 0.67 per cent, to 7,689.24.

The benchmark 10-year U.S. Treasury yield rose to a near two-week high after data showed that the U.S. trade deficit unexpectedly fell to a seven-month low in April, supporting the view of an acceleration of domestic economic growth in the second quarter.

The S&P financial sector, which rose 1.8 per cent, was the S&P’s biggest boost as bank stocks rose along with Treasury yields. Higher interest rates tend to help bank profits. The bank index rose 2.3 per cent as the sector was also helped by a rise in mortgage applications for the first time in seven weeks.

Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois cited economic data and trade news as reasons for the broader market’s advance.

Nasdaq’s biggest boost was from Comcast Corp, whose shares rose 3.8 per cent. Tesla shares jumped 9.7 per cent after Chief Executive Officer Elon Musk reassured shareholders that building 5,000 of its mass-market Model 3 cars per week by the end of June was “quite likely”.

While the technology sector reversed earlier losses to end the session with a 0.5 per cent gain, it lagged the broader S&P as well as sectors such as financials.

“That to me smacks of a rotation to value from growth,” said Oakbook’s Sampson.

The utilities index was the only one of the S&P’s 11 major sectors in the red, with a 2.1 per cent decline.

Facebook was the biggest drag on the tech sector with a 0.8 per cent drop after the social networking company confirmed it collaborated with at least four Chinese companies on sharing user data.

Advancing issues outnumbered declining ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored advancers.

The S&P 500 posted 57 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 278 new highs and 24 new lows.

On U.S. exchanges 6.88 billion shares changed hands, compared to the 6.64 billion average for the last 20 sessions.

TSX rises, helped by materials

The Toronto Stock Exchange’s S&P/TSX rose 61.68 points, or 0.38 per cent, to 16,183.93 points.

The biggest contributor to the TSX gain was Nutrien and materials was the top sector contributor, up 1.7 per cent.

Leading the index were Aurora Cannabis Inc, up 12.4 per cent, Valeant Pharmaceuticals International Inc, up 7.5 per cent, and First Quantum Minerals Ltd, higher by 7.1 per cent.

Lagging shares were IAMGOLD Corp, down 3.9 per cent, Empire Company Ltd, down 3.7 per cent, and Dream Global REIT, lower by 3.1 per cent.

On the TSX 136 issues advanced and 106 declined as a 1.3-to-1 ratio favored advancers. There were 16 new highs and 2 new lows, with total volume of 184.9 million shares.

The most heavily traded shares by volume were Aurora Cannabis Inc, Aphria Inc and Canopy Growth Corp .

The TSX’s energy group rose 0.08 points, or 0.04 per cent, while the financials sector climbed 0.77 points, or 0.26 per cent.

West Texas Intermediate crude futures fell 0.61 per cent, or $0.4, to $65.12 a barrel. Brent crude rose 0.61 per cent, or $0.46, to $75.84

The TSX is off 0.2 per cent for the year.


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