The stock market traded higher Thursday after regional banks bounced. Big Tech and the Nasdaq composite bucked the early downward tide, trading higher, while small caps shed opening losses. Regional bank stocks got some relief as First Republic Bank may get a new lifeline.
Treasury Secretary Janet Yellen testified before the Senate Finance Committee Thursday morning, insisting the banking system remains strong.
JPMorgan Chase, Morgan Stanley and other big banks are in talks for a potential deal with First Republic Bank. This would include a large capital infusion to the strained regional bank.
The CME FedWatch Tool now expects a 83% chance of a 25-basis-point rate hike at the March meeting. Nearly 17% expect no change in rates.
NYSE and Nasdaq volume were lower than midday Wednesday.
The Dow Jones Industrial Average added 0.4% while the S&P 500 rose 1.2%. The Nasdaq composite gained 1.9%.
The Russell 2000 traded 0.7% higher after a loss of more than 1% early Thursday. The 15% regional bank component weighed on the small-cap index.
The Dow and S&P 500 tested resistance at their 50- and 200-day moving averages, while the Nasdaq reclaimed those critical price levels.
The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF added 1.7%. The Innovator IBD 50 ETF gained 2%.
The 10-year U.S. Treasury yield edged up 2 basis points to 3.52%.
Economic Data Moves Stock Market
Crude oil inched up 0.1% to $67.62 per barrel. Bitcoin futures rallied 1.7% to $24,900.
European stock markets rose, with the German DAX up 1.8% and Paris CAC adding 2.5%. The London FTSE gained 1.1% in afternoon trading.
The European Central Bank raised interest rates by 50 basis points, taking the key rate to 3% as expected.
Initial jobless claims for the week ending March 11 came in at 192,000 vs. Econoday's 205,000 consensus, and lower than last week's revised 212,000. The data shows continued strength in the jobs market.
Warren Buffett Buys More OXY; First Republic Stock Sinks
Warren Buffett's Berkshire Hathaway bought over 7.88 million shares of Occidental Petroleum, worth close to $467 million. OXY rose 1.8% on the news.
PagerDuty popped over 16% after reporting a beat on Q4 top and bottom lines.
Adobe gained 5.6% after reporting better-than-expected February-ended quarter earnings and sales. It also raised full-year revenue guidance Wednesday after the bell.
Quarterly EPS grew 13% while sales rose 9%, boosted by Digital Media revenue growing 9% and Digital Experience sales increasing 11%. Analysts project 12% annualized EPS growth in 2023 and 14% in 2024.
Credit Suisse rose 3% after agreeing to borrow up to nearly $54 billion from the Swiss National Bank, keeping the bank afloat.
First Republic Bank dropped over 16% after Bloomberg reported the failed bank is seeking strategic options, including a potential sale of the firm.
Western Alliance Bank clawed back from losses, up 2.1% after a credit-rating agency put the troubled bank's debt and deposit ratings on a negative watch.
The SPDR Select Regional Bank ETF pared early losses, rising 0.9%. The SPDR Select Financial ETF rallied 1.2%.
Market Rally Needs To Do This; FedEx Soars Past Buy Point
Stock Market Today: Sports Retailer Breaks Out
Facebook and Instagram parent Meta Platforms rose 1.3%. Shares moved on news of potential U.S. and UK restrictions on Chinese social media competitor TikTok.
Shares broke out Wednesday, hitting the 197.26 buy point of a flat base. The relative strength line reached a 52-week high, as indicated by the blue dot on the weekly MarketSmith chart. The social media stock is an IBD SwingTrader position.
Snapchat parent SNAP gained 6.7% in Thursday's stock market on the TikTok news.
Academy Sports & Outdoor popped 9% in heavy volume. Shares broke out of a flat base, hitting the 63.99 buy point, after better-than-expected Q4 EPS and lower-than-forecast sales.
Management gave full-year net sales numbers above analysts' expectations. The sporting goods retail stock's relative strength line hit a 52-week high on the weekly chart.
Five Below fell 2.1% after reporting better-than-expected Q4 sales, but gave lower Q1 EPS guidance.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
