Wall St ends up; financials gain with bond yields

S&P financial index climbs 0.7%, among the day's top sector performers

US stocks rose on Wednesday, helped by optimism that Greece was close to an agreement to avoid default and as further gains in bond yields lifted financials.

The S&P financial index climbed 0.7% and was among the day's top sector performers as US benchmark Treasury debt yields jumped to seven-month highs, extending recent gains.

Adding to the day's upbeat tone, Greece's international creditors signalled they were ready to compromise to avert a default even as Athens indicated it might skip an IMF loan repayment due this week.

"Yields going higher is a net positive for all of the financials. Higher yields on fixed income translate into higher rates and that increases the net interest margin for financials," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

Economic data bolstered the view the Federal Reserve may consider raising interest rates later this year, including reports showing the US trade deficit narrowed in April on a drop in imports and private sector jobs in May.

The Dow Jones industrial average rose 64.33 points, or 0.36%, to 18,076.27, the S&P 500 gained 4.47 points, or 0.21%, to 2,114.07 and the Nasdaq Composite added 22.71 points, or 0.45%, to 5,099.23.

The Fed, in its Beige Book report, said US economic activity expanded from early April to late May and growth was expected to continue at a "modest" to "moderate" pace.

The consumer discretionary index rose 0.7%.

Ten-year bond yields have risen about 28 basis points in three days, their biggest rise in a comparable period in nearly two years. While that boosted financials, it weighed on utilities index for a second day. The index was down 1.4%.

Logistics company C.H. Robinson jumped 5.5% to $64.62 and was the biggest daily%age gainer in the S&P 500. It also lifted the Dow Jones transportation average, which was up 1.2%, bouncing back from near correction territory last week.

Wendy's rose 3.3% to $11.47 after the hamburger chain said it would buy back $1.4 billion of shares, including some from Nelson Peltz's Trian Group, its largest shareholder.

Advancing issues outnumbered declining ones on the NYSE by 1,548 to 1,503, for a 1.03-to-1 ratio; on the Nasdaq, 1,908 issues rose and 863 fell for a 2.21-to-1 ratio favouring advancers.

The S&P 500 posted 11 new 52-week highs and 4 new lows; the Nasdaq Composite 151 new highs and 21 new lows.

About 6 billion shares changed hands on US exchanges, below the 6.2 billion daily average for the last five sessions, according to BATS Global Markets.