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Jobless claims remain low, new home sales rise
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Block Inc slides after Hindenburg discloses short position
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US SEC threatens to sue Coinbase, shares drop
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Regional banks head lower
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Indexes up: Dow 0.44%, S&P 0.66%, Nasdaq 1.30%
(New throughout, adds NEW YORK dateline, changes byline)
By Stephen Culp
NEW YORK, March 23 (Reuters) - Wall Street advanced on
Thursday as market participants looked past remarks by U.S.
Federal Reserve Chairman Jerome Powell on Wednesday and weighed
the possibility that the central bank will pause its restrictive
interest rate hikes in the near future.
All three indexes marked the three-year anniversary of the
nadir of the COVID-19 crash by heading higher, with megacap
growth stocks, led by Microsoft and Apple Inc ,
providing the most upside muscle and putting the tech-heavy
Nasdaq out front.
"Today the market is bouncing back on what was a dovish Fed
hike yesterday," said Ross Mayfield, investment strategy analyst
at Baird in Louisville, Kentucky. "Powell did a good job
sticking to the party line on inflation and continued to jawbone
hawkish even though the hike leaned dovish."
"It’s not too crazy for markets to see that pivot in the
near future," Mayfield added.
The risk-on session reversed Wednesday's late-session
sell-off after the Fed's rate hike, Powell's subsequent Q&A
session and Treasury Secretary Janet Yellen's testimony before
congress in which she ruled out blanket protection for all
deposits.
In view of recent turmoil in the financial sector, which
began with the failures of SVB Financial Group and
Signature Bank , worries that the Fed was overtightening
and pushing the economy perilously close to recession, Powell's
reiterance of the Fed's determination to cool inflation sparked
a late session flight to safety.
Jitters among regional banks persist, with the KBW Regional
Bank index sliding 2.3%.
Comments from the Bank of England that inflation will
probably quickly fade also helped fuel hopes of light at the end
of the central bank tightening tunnel.
The BoE's commentary "paints a picture of a global central
banking system that's ready to slow the pace of their hiking,"
Mayfield said.
But economic data released on Thursday showed jobless claims
inching lower and new home sales posting a surprise gain,
providing fresh evidence that the economy is yet to show the
kind of softening that would lend itself to cooling inflation.
The Dow Jones Industrial Average rose 142.01 points,
or 0.44%, to 32,172.12, the S&P 500 gained 26.11 points,
or 0.66%, to 3,963.08 and the Nasdaq Composite added
151.81 points, or 1.3%, to 11,821.77.
Among the 11 sectors of the S&P 500, communication services and tech led the percentage gainers.
First Republic Bank dropped 8.6% in volatile trading
in the wake of Yellen's testimony.
Chipmaker Nvidia Corp advanced 2.2% after Needham
raised its price target.
Block Inc shares slid 14.6% after Hindenburg Research
disclosed its short positions in the company.
Crypto exchange Coinbase Global Inc dropped 14.0%
in the wake of the U.S. Securities and Exchange Commission's
threat to sue the company.
Accenture surged 7.1% after it announced plans to
cut about 2.5% of its workforce.
Advancing issues outnumbered declining ones on the NYSE by a
1.11-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted four new 52-week highs and 14 new lows;
the Nasdaq Composite recorded 45 new highs and 197 new lows.
(Reporting by Stephen Culp; Additional reporting by Amruta
Khandekar and Ankika Biswas in Bengaluru
Editing by Marguerita Choy)
