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GameStop jumps after surprise Q4 profit
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Fed Chairman Powell's Q&A session ongoing
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Bank indexes snap recent winning streak, head lower
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Indexes up: Dow 0.34%, S&P 0.56%, Nasdaq 0.83%
(Updates with market reaction to Powell remarks)
By Stephen Culp
NEW YORK, March 22 (Reuters) -
Wall Street gyrated higher on Wednesday after the U.S. Federal Reserve delivered a widely expected 25 basis point policy hike, while hinting that it was on the verge of pausing future uncreases in view of recent turmoil in the financial sector.
The three major U.S. stock indexes, which were mostly languid prior to the Fed announcement, whipsawed in the immediate aftermath as investors digested the hike and the accompanying statement.
In that
statement , the members of the Federal Open Markets Committee (FOMC) said some additional tightening might be possible, but suggested it was on the verge of pausing future hikes in view of recent turmoil in the financial sector.
Gains pared as Chairman Jerome Powell's remarks and Q&A session got underway, during which he vowed to use all available tools to keep the banking system sound, but reiterated the central bank's commitment to reining in inflation. Worries persist that the Fed's aggressive battle against inflation could tip the economy into recession, and recent turmoil in the banking sector, sparked by failures of SVB Financial Group and Signature Bank , have exacerbated those fears.
"The Fed has been spooked by Silicon Valley Bank and other banking turmoil," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York. "They certainly point to that as a potential depressant on inflation, perhaps helping them do their job without having to raise rates as aggressively." By
2:42 p.m. ET (1842 GMT), the Dow Jones Industrial Average rose 109.41 points, or 0.34%, to
32,670.01 , the S&P 500 gained 22.35 points, or 0.56%, to
4,025.22 and the Nasdaq Composite added 98.26 points, or 0.83%, to
11,958.37 .
Among the 11 major sectors of the S&P 500, tech was the clear frontrunner, while real estate suffered the largest percentage loss.
The banking sector reversed course after a two-session rebound, with the S&P Banks index and the KBW Regional Bank index off 1.1% and 1.7%, respectively. Shares of First Republic slipped
2.3 % in volatile trade amid
worries
that it may need to downsize or seek government support.
Pacific Western Bank announced it had raised $1.4 billion from investment firm Atlas SP Partners. Its shares dropped
8.8 %.
Western Alliance Bancorp , however, rose
1.8 %.
Retail darling GameStop Corp surged 40.2% after
posting a surprise fourth quarter profit.
Other so-called "meme stocks" which were at the heart of the
social media-driven retail frenzy in 2021, AMC Entertainment
Holdings Inc and Koss Corp , advanced 3.9% and
5.0%, respectively.
Used car e-commerce platform Carvana Co jumped
12.5% following its announcement that it expects a smaller
current quarter loss as a result of cost-cutting measures.
Virgin Orbit Holdings Inc soared 53.8% after
Reuters reported the satellite launch firm is nearing a deal to
raise $200 million from venture capital investor Matthew Brown.
Nike Inc dropped 2.4% after the sports apparel maker
raised its full-year revenue outlook on Tuesday but warned of
margin pressures.
Declining issues outnumbered advancing ones on the NYSE by a
1.05-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.
The S&P 500 posted four new 52-week highs and six new lows;
the Nasdaq Composite recorded 35 new highs and 98 new lows.
(Reporting by Stephen Culp in New York; Additional reporting by
Noel Randewich in New York, and by Amruta Khandekar and Shubham
Batra in Bengaluru; Editing by Marguerita Choy)
