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Financial Stocks May Lead Way Higher on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Friday, with stocks likely to add to the gains posted in the previous session.

Continued strength in the financial sector may push the markets higher after most of the nation?s largest banks passed the Federal Reserve?s annual stress test.

Financial giants such as Wells Fargo (WFC), Citigroup (C), and JPMorgan Chase (JPM) have subsequently announced billions of dollars in stock buybacks and raised their quarterly dividends.

Strength in the overseas markets may also generate early buying interest on Wall Street despite lingering trade concerns.

After seeing modest weakness early in the session, stocks showed a notable move to the upside over the course of the trading day on Thursday. The rebound on the day came on the heels of the pullback seen on Wednesday.

The major averages pulled back off their highs going into the close by still ended the day in positive territory. The Dow rose 98.46 points or 0.4 percent to 24,216.05, the Nasdaq advanced 58.60 points or 0.8 percent to 7,503.68 and the S&P 500 climbed 16.68 points or 0.6 percent to 2,716.31.

The strength that emerged on Wall Street may partly have reflected bargain hunting, with the Dow bouncing off its lowest intraday level in almost two months.

Financial stocks helped to lead the way back to the upside, regaining ground after trending lower over the past several sessions.

The weakness seen earlier in the day partly reflected lingering concerns about the global economic impact of the ongoing trade dispute between the U.S. and other major economies.

During a rally in North Dakota on Wednesday, President Donald Trump claimed the European Union was set up to take advantage of the U.S.

Trump accused the EU of exporting products to the U.S. while refusing to import American products, which he argued is “not free trade, that’s stupid trade.”

Negative sentiment was also generated in reaction to a Commerce Department report showing weaker than previously estimated U.S. economic growth in the first quarter.

The report said real gross domestic product increased by 2.0 percent in the first quarter compared to the previous estimate of 2.2 percent growth. Economists had expected the pace of GDP growth to be unrevised.

The weaker than previously estimated growth reflected downward revisions to private inventory investment, consumer spending, and exports.

A separate report from the Labor Department showed a bigger than expected increase in initial jobless claims in the week ended June 23rd.

The report said initial jobless claims rose to 227,000, an increase of 9,000 from the previous week’s unrevised level of 218,000. Economists had expected jobless claims to inch up to 220,000.

Telecom stocks showed a strong move to the upside on the day, driving the NYSE Arca Telecom Index up by 1.3 percent.

The advance by the telecom index came after it ended Wednesday’s trading at its lowest closing level in well over a month.

Notable strength also emerged among tobacco stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca Tobacco Index.

Semiconductor, pharmaceutical, and chemical stock also saw some strength, while most of the other major sectors showed more modest moves.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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