Wall St gains with tech shares; regional banks fall
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[March 31, 2023] By
Caroline Valetkevitch
NEW YORK (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 was up 1.1% and gave the S&P 500 its
biggest boost, while the Philadelphia semiconductor index 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 ended down 2%, and the S&P 500 financial
index 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 rose 141.43 points, or 0.43%, to
32,859.03, the S&P 500 gained 23.02 points, or 0.57%, to 4,050.83 and
the Nasdaq Composite added 87.24 points, or 0.73%, to 12,013.47.
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Trader works on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., March 30, 2023.
REUTERS/Brendan McDermid
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 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.
(Reporting by Caroline Valetkevitch; additional reporting by Amruta
Khandekar and Ankika Biswas; Additional reporting by Sruthi Shankar;
Editing by Anil D'Silva, Vinay Dwivedi and Richard Chang)
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