Wall Street stocks rallied strongly on Wednesday, breaking a three-day losing streak as estimate-beating results from Wells Fargo helped financials to their biggest ever one day gains and oil prices dropped sharply.

Wells Fargo, the biggest bank on the West Coast, said second-quarter profits dropped 23 per cent to $1.75bn, hit by the tough housing market in California, but that was a smaller fall than had been expected. The bank raised its dividend by 10 per cent as well.