* Financials rebound after sell-off
* Energy shares up the most among 11 major S&P sectors
* Dow up 1%, S&P 500 up 0.65%, Nasdaq up 0.38%
(New throughout, updates to market close)
By Chuck Mikolajczak
NEW YORK, Aug 28 (Reuters) - U.S. stocks climbed on
Wednesday, recovering from early declines on gains in energy and
financial shares, but investors remained leery about the
potential for another flare-up in the U.S.-China trade war.
The financial sector .SPSY was up 0.91%, recouping all of
the prior day's losses that came on a deepening of the U.S.
Treasury yield curve inversion, which often precedes a
recession. Gains in the benchmark S&P 500 index .SPX were also
supported by a 1.40% jump in energy .SPNY stocks after
industry data showed a fall in stockpiles of U.S. crude,
boosting oil prices, which settled up more than 1.5%.
The two have been the worst performing of the 11 major S&P
sectors in August.
Investors took some relief in the lack of new developments
on the trade front, although the U.S. Trade Representative's
office on Wednesday reaffirmed President Donald Trump's plans to
impose an additional 5% tariff on a list of $300 billion of
Chinese imports starting on Sept. 1 and Dec. 15. "If you look at the sectors in terms of how the performance
has lined up, it looks like people are coming back to having
some belief in the economy," said Peter Jankovskis, co-chief
investment officer at OakBrook Investments LLC in Lisle,
Illinois.
"It is sustainable but it depends a lot on what sort of
announcements we have because realistically the economy is in
pretty decent shape, it is just the concern is to the whole
trade situation pulling the rug out from underneath it."
Next week, investors will look toward the monthly jobs
report and manufacturing data which could guide expectations on
the likelihood of another rate cut from the Federal Reserve at
its mid-September meeting.
The Dow Jones Industrial Average .DJI rose 258.2 points,
or 1%, to 26,036.1, the S&P 500 .SPX gained 18.78 points, or
0.65%, to 2,887.94 and the Nasdaq Composite .IXIC added 29.94
points, or 0.38%, to 7,856.88.
In another factor that could support stock prices, the
30-year U.S. Treasury yield fell below that of the S&P 500
dividend yield, making equities a more attractive income
alternative.
"Whether it is the Federal Reserve signaling more cuts in
the future or just in general this rally in the bond market, but
overall lower rates you would think put some sort of floor on
the market as well," said Mark Kepner, equity trader at Themis
Trading in Chatham, New Jersey.
Shares of Autodesk Inc ADSK.O slid 6.74%, as the worst
performer on the S&P 500, after the company cut its full-year
earnings forecast.
Shares of Tiffany & Co TIF.N rose 3.02% after the luxury
jeweler reported quarterly earnings above analysts' estimates.
Advancing issues outnumbered declining ones on the NYSE by a
2.44-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and 38 new lows; the
Nasdaq Composite recorded 26 new highs and 154 new lows.
About 5.81 billion shares changed hands in U.S. exchanges,
compared with the 7.42 billion daily average over the last 20
sessions.
S&P dividend yield vs 30-yr U.S. Treasury https://tmsnrt.rs/2zqVAu7
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