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* Cisco rises as profit, revenue top estimates
* Banks rally as Wells Fargo bounces off 11-year low
* Weekly jobless claims worse than expected
* Indexes rise: Dow 0.83%, S&P 0.42%, Nasdaq flat (Adds details; Updates prices)
By Medha Singh and Ambar Warrick
May 14 (Reuters) - Wall Street’s main indexes turned higher in volatile trade on Thursday with bank stocks leading the charge, even as renewed worries about Sino-U.S. trade relations and fears of a prolonged economic weakness lingered.
Bank stocks gained 3.9% with Wells Fargo & Co rising 7.2% off a 11-year low on speculation that the bank could merge with peer Goldman Sachs Inc.
Seven of the 11 major S&P sectors were higher with S&P financials up 2.2%. Energy stocks also rose 1.6% as oil prices jumped.
“Value investors probably came in here and said enough is enough. The markets like that the banks are showing some life,” said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.
Markets were recovering from significant losses earlier in the session as President Donald Trump said he was disappointed with China over its failure to contain the novel coronavirus, saying the pandemic cast a pall over his trade deal with Beijing.
Trump’s remarks added to concerns over a potentially extended period of economic weakness that was forecast by Federal Reserve Chairman Jerome Powell, as well as a warning from U.S. infectious disease expert Anthony Fauci that the COVID-19 outbreak was not yet under control this week.
Wall Street’s main indexes are set for their steepest weekly drop since March, following a strong rally off their 2020 lows on hopes economic activity would pick up as virus-led restrictions are lifted.
“It’s a battle ground between the bulls, who think it’s only going to be a one or two quarter problem and bears, who argue it is going to take a lot longer that,” Bright Trading’s Dick said.
“It remains to be seen which side will win.”
Economic readings continued to reflect the pain caused by the pandemic, as data showed 2.98 million Americans filed for state unemployment benefits last week, higher than economists’ estimates.
At 1:50 p.m. ET, the Dow Jones Industrial Average was up 192.43 points, or 0.83%, at 23,440.40, the S&P 500 was up 11.79 points, or 0.42%, at 2,831.79. The Nasdaq Composite was down 2.22 points, or 0.03%, at 8,860.95.
Cisco Systems Inc rose 4.4% after beating quarterly revenue and profit estimates, as lockdowns globally boosted demand for its remote-work tools and networking equipment.
Declining issues outnumbered advancers for a 1.30-to-1 ratio on the NYSE and a 1.54-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 16 new lows, while the Nasdaq recorded 16 new highs and 110 new lows. (Reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta)