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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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Lyft slumps as lower fares stoke margin concerns
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Indexes up: Dow 1.39%, S&P 1.25%, Nasdaq 1.19%
(Updates prices to open)
By Ankika Biswas and Sruthi Shankar
May 5 (Reuters) - Wall Street's main indexes gained on
Friday as Apple's upbeat results underscored resilience in
corporate earnings, while a stronger-than-expected jobs report
eased fears of an imminent economic downturn.
Apple Inc gained 4.4% on better-than-expected
results, helped by strong iPhone sales and notable inroads in
India and other newer markets, fuelling a near 2% advance in
technology stocks .
Investors appeared to take in stride data showing U.S.
employers boosted hiring in April while raising wages, pointing
to sustained labor market strength that could prompt the Federal
Reserve to keep interest rates higher for some time.
The Labor Department's report showed non-farm payrolls
increased by 253,000 last month, higher than economists'
expectations of 180,000.
Wages increased 4.4% year-on-year in April after climbing
4.3% in March, while the unemployment rate fell to 3.4%.
"This is a strong report and shows that the labor market is
resilient. It bails out the Fed for raising another quarter
point," said Peter Cardillo, chief market economist at Spartan
Capital Securities.
"It's been a tough week for the stock market, the regional
banking problems have raised the fear factor, but Apple earnings
came in strong. Stocks are coming up from near-term oversold
condition."
Traders are betting the Fed will start easing the policy
rate by September, according to CME Group's FedWatch Tool,
compared with July before the release of the jobs data.
The Fed raised its interest rate by 25 basis points as
expected on Wednesday, but 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.
Wall Street fell on Thursday after PacWest Bancorp's move to explore strategic options deepened concerns
about the health of regional banks, pulling down shares of peers
and big banks such as JPMorgan Chase and Wells Fargo &
Co .
PacWest rebounded on Friday with a 48.3% gain, while
Western Alliance Bancorp bounced back 32.0%. Western
Alliance on Thursday denied a report that it was exploring a
potential sale.
At 9:48 a.m. ET, the Dow Jones Industrial Average was
up 459.05 points, or 1.39%, at 33,586.79, the S&P 500 was
up 50.85 points, or 1.25%, at 4,112.07, and the Nasdaq Composite was up 141.80 points, or 1.19%, at 12,108.20.
Following upbeat results from megacap companies, analysts
expect profits for S&P 500 companies in the first quarter to
decline 0.9% from a year earlier, according to Refinitiv data,
compared with a 5.1% drop expected at the start of April.
Used-car retailer Carvana Co jumped 30.8% as it
expects to post a profit in the current quarter and plans to
further bring down excess used-car inventory.
Lyft Inc slumped 19% as the ride-hailing company's
strategy to claw back market share from rival Uber Technologies
Inc with lower fares stoked concerns about a hit to its
profit margins.
Advancing issues outnumbered decliners for a 6.06-to-1 ratio
on the NYSE and a 3.47-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and two new
lows, while the Nasdaq recorded 37 new highs and 43 new lows.
(Reporting by Ankika Biswas and Sruthi Shankar in Bengaluru;
Additional reporting by Stephen Culp in New York; Editing by
Subhranshu Sahu and Shounak Dasgupta)
