Stocks Rally; Dow Up Triple Digits

US stocks

U.S. stocks rally after yesterday's drop, with the Dow Industrial adding more than 160 points led by higher financial stocks.

The Dow Jones Industrial Average climbed 163 points, or 0.77% to just above 21,473. The Nasdaq Composite and the S&P 500 index were also rising, gaining 0.96% and 0.82% respectively.

Stocks slid yesterday with the Nasdaq taking the brunt of the selling as the technology and the biotech sectors fell under pressure.

Today, the iShares Nasdaq Biotechnology ETF is up 1.2%. Tech stocks are also on the mend, with the Technology Select Sector SPDR ETF inching 0.6% higher.

The Financial Select Sector SPDR ETF rose almost 1.4% and the iShares U.S. Financial ETF gained 1.15%.

Stocks seem to have gotten some help from the ECB. Draghi’s comments were interpreted as very hawkish yesterday and officials today backed away from looking at them as a large change in view from the top of the ECB. While asset purchases will likely be trimmed in 2018, markets are less worried about a quicker exit strategy.

Goldman Sachs strategist David Kostin took some of the edge off worries of a big drop ahead when he raised his year-end price target for the S&P 500 to 2400 from 2300. Granted, that is a slight drop from where the index now trades. But Kostin says higher EPS estimates suggest less downside risk ahead.

Meanwhile, markets will also be watching for progress, or the lack of it, on major policy initiatives in Congress ahead of their planned August recess. Biotech stocks were hit hard yesterday by news that the Senate had delayed a vote on legislation to repeal and replace Obamacare.

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