Wall St. up 1% in Broad Rally; Intel weighs on Nasdaq
U.S. stocks rose in a broad rally on Thursday, with banking stocks among the biggest gainers of the day, though tech shares were pressured by a weak outlook from Intel.
Nine of the 10 primary S&P 500 sectors were higher on the day, though the rally only represented a partial rebound off a recent bout of weakness, which took the S&P 500 down in eight of the past 11 sessions, and off 3 percent over the past four sessions alone.
The weakness has largely been driven by concerns the Fed could raise rates as early as June. Last week’s strong payroll report solidified this view as the central bank said it would begin raising rates when it deemed the economy strong enough.
In the latest data, jobless claims fell far more than expected in the latest week, supporting the theory that the labor market is rapidly strengthening. Retail sales unexpectedly dropped for a third month in February.
“I’ve been a believer in a June rate hike for a while, but the odds really went up on Friday, and the market action we’ve seen since then is in line with the volatility we’ve historically seen around rate hikes,” said James Liu, global market strategist for JPMorgan Funds in Chicago.
The S&P financial sector .SPSY rose 1.4 percent as one of the biggest gainers on the day in the wake of the Federal Reserve’s annual check-up on the industry’s health.
Citigroup (C.N) passed, allowing it to raise payouts and sending shares up 3.1 percent to $53.96. Bank of America (BAC.N) was told to get a better grip on internal controls and its data models; shares fell 0.7 percent to $16.
Intel Corp (INTC.O) slashed its first-quarter revenue forecast, citing lower-than-expected demand for business PCs and lower inventory levels across the PC supply chain. Shares of the Dow component fell 4.2 percent to $30.96 and limited the Nasdaq’s advance.
Crude oil CLc1 fell 1.4 percent to $47.51, continuing a recent spate of volatility. Weakness in the commodity pressured energy stocks .SPNY, which fell slightly as the only declining industry group on the day.
Lumber Liquidators (LL.N) rose 12 percent to $36.79 in volatile trading. The company, facing U.S. government investigations over claims of dangerous levels of a cancer-causing substance in its flooring products, stood by the safety its products and offered free indoor air-quality testing for qualifying consumers.
The Dow Jones industrial average .DJI rose 183.84 points, or 1.04 percent, to 17,819.23, the S&P 500 .SPX gained 18.3 points, or 0.9 percent, to 2,058.54 and the Nasdaq Composite .IXIC added 24.08 points, or 0.5 percent, to 4,874.02.
Advancing issues outnumbered declining ones on the NYSE by 2,236 to 719, for a 3.11-to-1 ratio on the upside; on the Nasdaq, 1,800 issues rose and 840 fell for a 2.14-to-1 ratio favoring advancers.
The S&P 500 was posting 16 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 98 new highs and 59 new lows.
Source: Reuters
