The U.S. stock market notched its biggest gain in two months Wednesday, bouncing back from Tuesday's losses.
Banks and other financial firms led the rally as investors bet on interest rates climbing further. Banks can make more money on lending when rates move up.
Technology companies were among the big gainers, recouping some of their recent losses. Energy stocks rose as the price of crude oil closed higher for the fifth straight day. Utilities and real estate companies were the only laggards.
"Across the board, sector strength is very, very strong," said Marc Chaikin, chief executive of Chaikin Analytics. "Whoever wanted to sell into the holiday weekend basically did it yesterday, and we probably have a positive bias going into the four-day weekend."
The Standard & Poor's 500 index climbed 21.31 points, or 0.9%, to 2,440.69. That's the index's biggest single-day gain since April 24. The Dow Jones industrial average advanced 143.95 points, or 0.7%, to 21,454.61. The Nasdaq composite rose 87.79 points, or 1.4%, to 6,234.41.
Smaller companies fared better than the rest of the market. The Russell 2000 index of small-company stocks jumped 21.75 points, or 1.6%, to 1,425.27.
Bond prices fell. The 10-year Treasury yield rose to 2.22% from 2.21%.
The market rebounded from Tuesday's technology-led sell-off.
"These equity markets are perhaps in more of a relief rally, with investors coming back in after being away a bit here," said Chris Gaffney, president of World Markets at EverBank. "It is the end of the quarter, so we'll probably see more volatility."
Traders bid up shares in financial-sector companies amid heightened expectations that interest rates could be headed higher.
Bank of America shares climbed 2.6% to $23.88. Prudential Financial rose 2.5% to $107.26. Wells Fargo ticked up 2.2% to $54.33.
Investors also bid up shares in companies that reported improved quarterly results.
Los Angeles homebuilder KB Home leaped 5.4% to $24.06. Irvine wireless communications firm CalAmp jumped 6.2% to $20.44. General Mills, the maker of Cheerios cereal, Yoplait yogurt and other packaged foods, advanced 1.6% to $56.42.
News of corporate deals also helped lift the market.
Staples climbed 8.5% to $9.94 after the Wall Street Journal reported that the office supplies retailer agreed to be acquired by private equity firm Sycamore Partners. The stock was the biggest gainer in the S&P 500 index.
Spectranetics surged 26.2% to $38.35 after Dutch electronics and healthcare technology firm Philips said it agreed to buy the medical device company for $38.50 a share, or $2.2 billion.
FedEx shares temporarily halted trading before the package delivery giant disclosed that an information system virus significantly affected the global operations of its TNT Express subsidiary.
In a statement, FedEx said that although TNT's operations and communications systems were disrupted, "no data breach is known to have occurred." The company said that operations of all other FedEx companies were unaffected. Its stock rose 1.3% to $217.15.
Oil and natural gas futures notched gains.
Benchmark U.S. crude rose 50 cents, or 1.1%, to $44.74 a barrel in New York. Brent crude, the international standard, rose 66 cents, or 1.4%, to $47.31 a barrel in London. Wholesale gasoline rose 2 cents to $1.48 a gallon. Heating oil rose 2 cents to $1.43 a gallon. Natural gas rose 3 cents to $3.07 per 1,000 cubic feet.
In other commodities trading, gold rose $2.20 to settle at $1,249.10 an ounce. Silver rose 14 cents to $16.73 an ounce. Copper rose 1 cent to $2.66 a pound.
The dollar rose to 112.28 yen from 112.15 yen. The euro strengthened to $1.1382 from $1.1347.
Major stock indexes in Europe declined as investors fretted over the prospect of tighter monetary policy from major central banks. Germany's DAX slid 0.2%, the CAC 40 of France fell 0.1% and Britain's FTSE 100 lost 0.6%.
Earlier in Asia, Hong Kong's Hang Seng fell 0.6%, Japan's benchmark Nikkei 225 index lost 0.5% and South Korea's Kospi shed 0.4%. Shares fell in Taiwan and most of Southeast Asia. Australia's S&P/ASX 200 gained 0.7%.
2:35 p.m.: This article was updated with closing prices, context and analyst comment.
9:45 a.m.: This article was updated with market prices, context and analyst comment.