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Regional banks rebound after bruising selloff
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U.S. employers add 253,000 jobs in April
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Indexes: Dow up 1.7%, S&P 500 up 1.9%, Nasdaq up 2.3%
(New throughout, updates with official closing prices, volume,
details on regional banks' rally, earnings graphic)
By Caroline Valetkevitch
NEW YORK May 5 (Reuters) - U.S. stocks rallied on
Friday, with the Dow posting its biggest one-day percentage gain
since Jan. 6, as shares of Apple surged more than 4% after
upbeat results and U.S. jobs data pointed to a resilient labor
market.
Adding to the bullish momentum, regional bank shares
rebounded from declines tied to the collapse of First Republic
Bank. Analysts upgraded a number of lenders they said were
oversold.
PacWest Bancorp rallied 81.7% and Western Alliance
Bancorp jumped 49.2%, while the KBW regional bank index advanced 4.7%.
Apple's quarterly results also cheered investors
worried about a potential recession. The iPhone maker's shares
hit their highest level in about nine months, and the stock
ended up 4.7% in its biggest daily percentage gain since
November.
The stock was the biggest positive influence on all three
major U.S. stock indexes.
The U.S. Labor Department report showed job growth
accelerated in April and wage gains increased solidly,
suggesting the labor market has stayed strong despite recent
interest rate hikes from the Federal Reserve.
With the jobs report, "it's about the state of the U.S.
economy, and what we saw today suggests it's in a better
position than previously expected," said Kristina Hooper, chief
global market Strategist at Invesco in New York.
Investors have been worried that the rate hikes may
eventually push the economy into recession.
The Dow Jones Industrial Average rose 546.64 points,
or 1.65%, to 33,674.38, the S&P 500 gained 75.03 points,
or 1.85%, to 4,136.25 and the Nasdaq Composite added
269.02 points, or 2.25%, to 12,235.41.
The Cboe Volatility index registered its biggest
one-day decline since March 16.
The Dow and S&P 500 still registered losses for the
week, however, while the Nasdaq ended with a slight gain for the
week.
On Wednesday, the U.S. central bank raised rates by 25 basis
points as expected, but Fed Chair Jerome Powell noted it was too
early to say with certainty that the rate-hike cycle was over as
inflation remains the chief concern.
Apple drove gains in other tech shares, but all 11 major S&P
sectors were higher on the day.
The estimated decline in first-quarter S&P 500 earnings has
been getting smaller since the start of the reporting season and
is now at just 0.7% year-over-year, Refinitiv data showed on
Friday.
Volume on U.S. exchanges was 10.57 billion shares, compared with the 10.70 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 4.95-to-1 ratio; on Nasdaq, a 2.75-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and 3 new lows;
the Nasdaq Composite recorded 87 new highs and 104 new lows.
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(Additional reporting by Ankika Biswas and Sruthi Shankar in
Bengaluru and Sinead Carew in New York; Editing by Subhranshu
Sahu, Shounak Dasgupta and David Gregorio)
