Indexes jump on inflation data; Nasdaq posts best qtr since 2020
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[April 01, 2023] By
Caroline Valetkevitch
NEW YORK (Reuters) - Wall Street rallied more than 1% on Friday and the
Nasdaq notched its biggest quarterly percentage gain since June 2020, as
signs of cooling inflation bolstered hopes the Federal Reserve might
soon end its aggressive interest rate hikes.
The S&P 500 closed at its highest level since Feb. 15 and posted a
second straight quarter of gains, led by the technology sector's 21.5%
rise in the first quarter.
The quarterly gains came despite a sharp sell-off in bank stocks
following the collapse of two regional banks earlier this month and
worries about a potential bigger financial crisis.
The S&P 500 financial sector was the quarter's worst-performing sector,
posting a 6.1% drop, while the KBW regional bank index fell 18.6% for
the period.
The Commerce Department report Friday showed U.S. consumer spending rose
moderately in February while inflation cooled.
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"The equity market seems to be delighted with the slight tick lower in
inflation, as it should be. It underscores that the Fed's campaign is,
in fact, working, albeit slowly," said Quincy Krosby, chief global
strategist at LPL Financial in Charlotte, North Carolina.
The Fed has been raising rates to cool inflation. Expectations for a 25
basis point rate hike at its May meeting dipped to about 50%, with no
hike seen to be just as likely.
The Dow Jones Industrial Average rose 415.12 points, or 1.26%, to
33,274.15, the S&P 500 gained 58.48 points, or 1.44%, to 4,109.31 and
the Nasdaq Composite added 208.44 points, or 1.74%, to 12,221.91.
For the week and month, stocks also posted strong gains. The Nasdaq was
up 6.7% for March.
For the quarter, the Nasdaq jumped 16.8% in its biggest quarterly
percentage increase since the three months ended June 2020. The S&P 500
gained 7% and the Dow rose 0.4% in the quarter, based on the latest
available data.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., March 30, 2023.
REUTERS/Brendan McDermid
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Semiconductors were among the quarter's strongest performing stocks,
with the Philadelphia semiconductor index rising 27.6%.
Shares of big tech gained as investors rotated out of banks and as
U.S. Treasury yields eased, with the two-year note yield posting on
Friday its largest monthly drop since 2008. Higher yields tend to be
a negative for big tech companies.
Apple Inc shares ended up 1.6% on Friday, rising along with other
megacaps. It also won its appeal against the decision by Britain's
antitrust regulator to launch an investigation into its mobile
browser and cloud gaming services.
Also on Friday, Boston Fed President Susan Collins said that
wherever the U.S. central bank stops with its rate rises,
maintaining that level for some time will be critical in helping to
lower high inflation back to the 2% target.
Volume on U.S. exchanges was 11.98 billion shares, compared with the
12.74 billion full-session average over the last 20 trading days.
Advancing issues outnumbered decliners on the NYSE by a 4.78-to-1
ratio; on Nasdaq, a 2.45-to-1 ratio favored advancers.
The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq
Composite recorded 81 new highs and 131 new lows.
(Reporting by Caroline Valetkevitch; additional reporting by Amruta
Khandekar and Ankika Biswas; additional reporting by Johann M
Cherian Editing by Vinay Dwivedi, Maju Samuel and Richard Chang)
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