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US: Strong banks lift stocks ahead of Comey hearing

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[NEW YORK] Gains by banking shares offset declines in energy producers Wednesday as Wall Street stocks advanced ahead of the British general election and congressional testimony from former FBI chief James Comey.

US stocks shook off two days of losses, propelled by large US banks after European officials announced the sale of Spain's Banco Popular to compatriot Banco Santander to avert a looming failure.

The move, seen as lessening systemic risk in global banking, boosted large banks in Europe and the United States. Bank of America, Citigroup and JPMorgan Chase all won more than one per cent.

The Dow Jones Industrial Average rose 0.2 per cent to close at 21,173.69.

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The broad-based S&P 500 also gained 0.2 per cent to end the session at 2,433.14, while the tech-rich Nasdaq Composite Index jumped 0.4 per cent to 6,297.38.

US stocks have avoided major swings this week ahead of a news-jammed Thursday that includes a European Central Bank meeting and the British general election, in addition to Mr Comey's appearance before a congressional panel.

In his testimony released Wednesday afternoon, Mr Comey said US President Donald Trump urged him to drop a probe into former national security advisor Michael Flynn and his contacts with Russia, confirming news reports.

US stocks did not react to the testimony, which also communicated the fired FBI chief's profound discomfort with Mr Trump's behaviour.

"People are waiting to see the question and answer," said FTN Financial chief economist Chris Low.

"One of the big questions is whether Republican Senators are going to bother to keep Trump out of trouble."

Petroleum-linked shares were sharply lower after a bearish US inventory report prompted a more than five per cent drop in US oil prices. Devon Energy slumped 5.8 per cent, ConocoPhillips fell 2.1 per cent and Schlumberger declined 1.9 per cent.

AFP

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