Dow hits record high as banks gain, tech recovers

By Sruthi Shankar

REUTERS - The Dow Jones Industrial Average hit a record intraday high as bank stocks rose ahead of a highly anticipated interest rate hike and as technology stocks rebounded.

Traders have priced in a 94 percent chance of the Federal Reserve raising interest rates. Investors are also looking for more details on the central bank's plans to trim its $4.5 trillion balance sheet.

The Fed is expected to release its decision at 2:00 p.m. ET (1800 GMT) on Wednesday followed by a press conference by Fed Chair Janet Yellen.

A bout of profit-taking in richly-valued technology stocks caused the Nasdaq to suffer its worst two-day drop in more than six months on Monday.

However, technology stocks staged a recovery on Tuesday. Apple, which had sparked the selloff, was up 1.3 percent at $147.29 and boosted the S&P 500 and the Nasdaq.

Big technology names like Microsoft, Alphabet and Facebook were also up about 1 percent, propping up the S&P technology sector.

"It (the market) wants to wait and see if the Fed's going to actually raise rates tomorrow, and then it wants to wait and see whether or not the tech stocks can actually rebound," said Adam Sarhan, chief executive officer at 50 Park Investments in Florida.

"If (the rebound) holds and the Fed does raise rates tomorrow, it would bode very well for bulls."

At 9:49 a.m. ET the Dow Jones Industrial Average was up 54.38 points, or 0.26 percent, at 21,290.05, the S&P 500 was up 7.57 points, or 0.31 percent, at 2,436.96 and the Nasdaq Composite was up 47.48 points, or 0.77 percent, at 6,222.95.

Six of the 11 major S&P 500 sectors were higher. Financials were up 0.6 percent, helped by gains in big banks after the U.S. Treasury Department announced sweeping changes to banking regulations on Monday.

The department proposed to reduce trading restrictions that big banks face, ease their annual stress tests, and curb the powers of the Consumer Financial Protection Bureau (CFPB).

Shares of Bank of America, Wells Fargo and JPMorgan were up about 1 percent. Goldman Sachs 1.5 percent gain was the driver behind the Dow's record intraday high.

Restaurant chain operator Cheesecake Factory was down 8.8 percent at $53.30 after it warned of a decline in comparable store sales in the current quarter.

Tesla was up 3 percent at $369.80 after Berenberg raised its rating on the stock to "buy" from "hold".

Advancing issues outnumbered decliners on the NYSE by 1,519 to 1,080. On the Nasdaq, 1,545 issues rose and 839 fell.

The S&P 500 index showed 28 new 52-week highs and 11 new lows, while the Nasdaq recorded 82 new highs and 70 new lows.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)