Wall St gains with tech shares; regional banks fall

The charts had a V-shape today as the Dow opened 165 up, then steadily lost about 200 shortly before 1 pm, then rose again just as steadily to close up just shy of where it opened at a +141.  The other indexes saw similar patterns but at least stayed in the black all day.  A second day of a tech rally was the trigger as the tech index reached its highest level in nearly a year and ready to end Q1 with a 20% gain, the Nasdaq on track for its biggest quarterly gain since the end of 2020.  

Today’s encouraging data included GDP continuing to fall if ever so slightly at 0.1% and jobless claims rising to support a cooling labor market, both good signs for a softer Fed. The only bad news was Biden’s stricter rules for strengthening mid-sized banks, something that should be good news given that we just averted a serious bank crisis.  But it did bring down the bank index. Anxiously awaiting tomorrow’s PCI and hoping it will show inflation continuing to cool so that we’ll have a softer Fed.  Volume remains well below average at just under 10.4 billion.   

Thu March 30, 2023  6:37 PM

Wall St gains with tech shares; regional banks fall

By Caroline Valetkevitch

DJ: 32,717.60  +323.35        NAS: 11,926.24  +210.16        S&P: 4,027.81  +56.54     3/29

DJ: 32,859.03  +141.43        NAS: 12,013.47  +87.23          S&P: 4,050.83  +23.02     3/30

NEW YORK, March 30 (Reuters) - U.S. stocks rose on Thursday as technology-related shares extended their recent strong run, while regional U.S. bank shares fell as the Biden administration proposed stronger measures to help reduce risk.  The S&P 500 technology index (.SPLRCT) was up 1.1% and gave the S&P 500 its biggest boost, while the Philadelphia semiconductor index (.SOX) hit its highest level in nearly a year. Wednesday's strong gains grew on optimism that a downturn in chip sales has ended.  U.S. regional bank shares fell as the Biden administration called for stricter rules that would strengthen mid-sized banks without having to go to Congress.  The KBW regional bank index (.KRX) ended down 2%, and the S&P 500 financial index (.SPSY) fell 0.3%, the only S&P 500 sector in negative territory on the day.

"Tech is probably the furthest sector removed from financials," so there has been a rotation away from financials, said Jack Ablin, chief investment officer at Cresset Capital in Chicago.  The banking turmoil, which started earlier this month with the collapse of two regional U.S. lenders, had sparked concerns about a broader financial crisis.  With one day to go in the first quarter, the technology sector was up about 20% for the period, leading sector gains along with communication services , which is up about 18%. Nasdaq is on track for its biggest percentage quarterly gain since the end of 2020.

Investors also awaited the February reading of personal consumption expenditures (PCE) price index due Friday after January figures showed a sharp acceleration in consumer spending.  Three Federal Reserve officials kept the door open on Thursday to more rate rises aimed at lowering inflation, with two noting banking sector problems could generate enough headwinds on the economy.

The Dow Jones Industrial Average (.DJI) rose 141.43 points, or 0.43%, to 32,859.03, the S&P 500 (.SPX) gained 23.02 points, or 0.57%, to 4,050.83 and the Nasdaq Composite (.IXIC) added 87.24 points, or 0.73%, to 12,013.47.

Fed funds futures traders are now pricing in a 55% chance of a 25-basis-point rate increase at the Fed's May 2-3 meeting.  Data earlier on Thursday showed jobless claims last week rose more than expected from the week before, indicating a cooling labor market.  Separately, fourth-quarter GDP growth was slightly lower at 2.6% compared with earlier estimates of 2.7%, both supporting the case for a softer Fed policy.  In another report, the Commerce Department confirmed the economy grew at a solid clip in the fourth quarter, but much of the increase in output came from inventory accumulation.

U.S.-listed shares of Alibaba Group Holding climbed 3.5% on a report that its logistics arm had started preparations with banks for its Hong Kong initial public offering, while those of JD.Com jumped 7.8% on plans to spin off its real estate infrastructure arm.  Faraday Future Intelligent Electric Inc (FFIE.O) rose after the company said it had started production of its first luxury electric car after a months-long delay, but the stock ended the day down slightly.

Advancing issues outnumbered decliners on the NYSE by a 2.70-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored advancers.  The S&P 500 posted eight new 52-week highs and no new lows; the Nasdaq Composite recorded 63 new highs and 151 new lows.

Volume on U.S. exchanges was 10.36 billion shares, compared with the 12.68 billion average for the full session over the last 20 trading days.