U.S. stocks rose on Thursday to end solidly in the green, helped by a recovery in regional banks, which rose after a report that big financial names were ready to step in and support First Republic Bank.
The tech-heavy Nasdaq Composite (COMP.IND) is over 2.48% higher at 11,717.28 points, the best one-day performance since early February.
The benchmark S&P 500 (SP500) advanced 1.76% to end at 3,960.28 points, while the blue-chip Dow (DJI) added 1.17% to settle at 32,246.55 points.
Wall Street’s main averages opened lower and wobbled as traders digested the European Central Bank’s (ECB) 50 basis point interest rate hike, despite talk of a smaller rate hike following recent financial turmoil sectors. The averages turned positive late in the morning and then extended their gains into the afternoon.
Investors largely skimmed economic data on Thursday. The number of Americans filing weekly jobless claims fell to 192,000, compared with the consensus figure of 205,000, indicating continued strength in the labor market. Meanwhile, the Philly Fed’s March business outlook came in at -23.2 versus a consensus of -15.6.
“Markets took a momentary break from their recent downtrend today. Although the latest economic data from the Philadelphia Fed confirmed earlier numbers from the New York Fed showing that the manufacturing sector is on the brink of recession, investors showed interest in buying stocks as the banking sector appears to be stabilizing,” said BN’s Leo Nelissen Capital over Seeking Alpha.
“Furthermore, with recent adverse economic news, the Federal Reserve is expected to announce a pause in its hike cycle soon. While the market is not out of the woods, it is likely to recover somewhat, supported by strong bearish sentiment,” Nellisen added.
Advances in shares of Intel ( INTC ) and other technology stocks also helped lift markets. Meanwhile, shares of First Republic Bank (FRC) made a significant bounce, reversing course and pushing higher. Bloomberg reported that multiple banks, including JPMorgan ( JPM ) , Citi ( C ) , Bank of America ( BAC ) , Wells Fargo ( WFC ) and Morgan Stanley ( MS ) are in talks to provide First Republic with $30 billion in deposits.
Nine of 11 S&P sectors closed in the green, led by technology and communications services. Consumer staples and real estate were the two losers.
Credit Suisse ( CS ) remained a hot topic of discussion after the lender secured a $54 billion bailout from the Swiss National Bank and its top shareholder said the bank would not need more capital. European markets eased after Wednesday’s decline.
Markets ended mixed in the previous session, weighed down by worries surrounding the global financial system amid the Credit Suisse ( CS ) saga.
In other economic data on the domestic front, new housing starts and building permits jumped in February. Export prices rose unexpectedly in February, while import prices fell less than expected.
Treasury yields collapsed in the previous session as investors fled to safe-haven assets such as bonds and gold. On Thursday, they advanced. The yield on the 10-year Treasury note ( US10Y ) added 9 basis points to 3.58%, while the yield on the 2-year note ( US2Y ) was higher by 17 basis points to 4.17%.
Among active stocks, First Republic Bank ( FRC ) ended as the S&P 500’s ( SP500 ) top gainer, a complete reversal from the day’s top loser.
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