Banks climb on passing annual health checks
Firstquarter GDP revised higher
Indexes Dow up 0.8, SP up 0.45, Nasdaq barely lower

June 29 Reuters The Dow and the SP 500 advanced on Thursday as bank shares rallied after major lenders cleared the Federal Reserve39;s annual stress test, while strong economic data stoked expectations of further interest rate hikes from the central bank.

Stronger than expected economic data pushed Treasury yields higher and steered investors toward economically sensitive sectors as recession fears eased. But buyers shied away from some ratesensitive growth sectors due to concerns the Fed would keep interest rates higher for longer.

After a health check showed that the biggest U.S. banks have enough capital to weather a severe economic slump the SP 500 banks index closed up 2.6. The relief rally also helped advance the KBW Regional Banking index by 1.8.

Data showed an unexpected weekly decline in the number of Americans filing new claims for unemployment benefits, and the U.S. GDP increased at a 2.0 annualized rate in the first quarter, up from the 1.3 pace reported previously.

The upside surprise economic data has pushed yields higher today and the move higher has put some downward pressure on technology and growth stock stocks while supporting value and cyclical parts of the market, said Mona Mahajan, senior investment strategist at St. Louis based Edward Jones.

The Dow Jones Industrial Average rose 269.76 points, or 0.8, to…