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Weekly jobless claims unexpectedly fall
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Regional bank stocks rise
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Block slides after Hindenburg says short on shares
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U.S. SEC threatens to sue Coinbase, shares tank
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Indexes up: Dow 0.61%, S&P 0.84%, Nasdaq 1.33%
(Updates prices to open; adds details, comments)
By Ankika Biswas and Amruta Khandekar
March 23 (Reuters) - Wall Street's main indexes climbed
on Thursday as major rate-sensitive technology and growth stocks
advanced after the Federal Reserve hinted it was close to
pausing interest rate hikes amid turbulence in the banking
sector.
The U.S. central bank on Wednesday raised rates by an
expected 25 basis points, but its policy statement no longer
said "ongoing increases" would likely be appropriate, indicating
a clear shift in its stance.
The Fed's softer tone relieved markets that have been roiled
by concerns about a liquidity crisis in the banking sector since
the failure of two U.S. regional lenders earlier this month.
Wall Street's main indexes had closed sharply lower on Wednesday after Fed Chair Jerome Powell said the central bank was still intent on fighting inflation even as he flagged credit issues due to banking troubles could have "significant" implications for the economy.
"Markets are hoping that you have one more interest rate hike to go, probably," said Robert Pavlik, senior portfolio manager, Dakota Wealth in Fairfield, Connecticut. "I would imagine the hopes (of a rate cut) are smashed. You don't want things going so south that you need a rate cut." Traders' bets are almost equally split between the Fed pausing its rate hikes in May and another 25 bps hike, according to CME Group's Fedwatch tool. As U.S. Treasury yields slipped on growing hopes of an end to the Fed's tightening cycle, Apple Inc , Microsoft and Amazon.com jumped between 0.9% and 1.6% in early trading. Communication services and information technology led the gains among the S&P 500 sector indexes, all of which rose, except utilities . Bank of America and UBS now see the Fed funds rate target peaking at 5-5.25% in May compared to earlier forecasts of 5.25-5.5%. Troubled regional lender First Republic Bank jumped 4.6% after slumping on Wednesday following Treasury Secretary Janet Yellen's remark that there was no discussion on insuring all bank deposits. PacWest Bancorp and Western Alliance Bancorp gained 2.7% and 7.1% , respectively. Meanwhile, data showed jobless claims falling to 191,000 last week from the week prior, against expectations that the number would rise to 197,000. At 9:33 a.m. ET, the Dow Jones Industrial Average was up 195.44 points, or 0.61%, at 32,225.55, the S&P 500 was up 33.23 points, or 0.84%, at 3,970.20, and the Nasdaq Composite was up 155.00 points, or 1.33%, at 11,824.95. Shares of Block Inc fell 20% after Hindenburg Research said it held short positions in the Jack Dorsey-led payments firm. Among others, Nvidia Corp rose 3.0% after Needham raised its price target on the chipmaker on likely benefit from near-term data center strength.
Coinbase Global Inc slid 16% after the U.S. Securities and Exchange Commission (SEC) threatened to sue the crypto exchange over some of its products. Accenture Plc rose 3.8% after the company said it would cut about 2.5% of its workforce. Advancing issues outnumbered decliners by a 3.62-to-1 ratio on the NYSE and 3.27-to-1 ratio on the Nasdaq. The S&P index recorded one new 52-week high and five new lows, while the Nasdaq recorded 17 new highs and 27 new lows. (Reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Savio D'Souza and Vinay Dwivedi)
