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U.S. stock markets rebounded Tuesday after the government’s decision to rescue two major regional banks that collapsed last week. Moreover, a key inflation data for February came inline with market’s expectation. However, investors remained cautious regarding the future trajectory of interest rate and its effect on the economy. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 1.1% or 336.26 points to close at 32,115.24, reversing a five-day losing streak, its longest streak since December. Notably, 22 components of the 30-stock index ended in positive territory and eight in negative zone.
The tech-heavy Nasdaq Composite finished at 11,428.15, climbing 2.1% or 239.31 points due to strong performance of large-cap technology stocks. The S&P 500 rallied 1.7% to end at 3,920.56. All 11 broad sectors of the benchmark index closed positive territory.
The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) the Financials Select Sector SPDR (XLF) and the Consumer Discretionary select Sector SPDR (XLY) gained 2.8%, 2.3%, 2% and 1.7%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 10.5% to 23.73. A total of 13.84 billion shares were traded on Tuesday, higher than the last 20-session average of 11.64 billion. Advancers outnumbered decliners on the NYSE by a 2.60-to-1 ratio. On Nasdaq, a 1.83-to-1 ratio favored advancing issues.
Rescue Package for Failed Banks
Last weekend, a joint statement from the Fed, Treasury Department and the Federal Deposit Insurance Corp. (FDIC) said all Silicon Velley Bank and Signature Bank depositors will be able to access to their money starting Mar 13. Moreover, the central bank is in the process of creating a new Bank Term Funding Program in order to safeguarding deposits. Per CNBC, the facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions.
Shares of Regional Banks Rebound
A joint attempt by the Federal Government and the Federal Reserve was able to restore confidence on investors to some extent. SPDR S&P Regional Banking ETF (KRE) gained 2.1% after decaling 9% on Monday and 16% in the prior week.
As investors’ confidence boosted, market participants shifted their funds to equities. As a result, bond prices fell and yield to maturity steadied. On Mar 14, the yield on the short-term 2-Year U.S. Treasury Note appreciated 30 basis points to 4.33%, after dropping 59 basis points on the previous day. Moreover, the yield on the benchmark 10-Year U.S. Treasury Note rose 14 basis points to 3.68%.
February CPI In line with Expectation
The Department of Labor reported that the consumer price index (CPI) in February rose 0.4% month over month, in line with the consensus estimate. This inflation gauge increased 0.5% in January. Year over year, CPI climbed 6% in February, marking its lowest monthly increased since September 2021.
Core CPI (excluding the volatile food and energy items) 0.5% moth over month in February. The consensus estimate was 0.4%. Core CPI increased 0.4% in January too. Year over year, core CPI surged 5.5% in February, in line with the consensus estimate.
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Stock Market News for Mar 15, 2023
U.S. stock markets rebounded Tuesday after the government’s decision to rescue two major regional banks that collapsed last week. Moreover, a key inflation data for February came inline with market’s expectation. However, investors remained cautious regarding the future trajectory of interest rate and its effect on the economy. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 1.1% or 336.26 points to close at 32,115.24, reversing a five-day losing streak, its longest streak since December. Notably, 22 components of the 30-stock index ended in positive territory and eight in negative zone.
The tech-heavy Nasdaq Composite finished at 11,428.15, climbing 2.1% or 239.31 points due to strong performance of large-cap technology stocks. The S&P 500 rallied 1.7% to end at 3,920.56. All 11 broad sectors of the benchmark index closed positive territory.
The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) the Financials Select Sector SPDR (XLF) and the Consumer Discretionary select Sector SPDR (XLY) gained 2.8%, 2.3%, 2% and 1.7%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 10.5% to 23.73. A total of 13.84 billion shares were traded on Tuesday, higher than the last 20-session average of 11.64 billion. Advancers outnumbered decliners on the NYSE by a 2.60-to-1 ratio. On Nasdaq, a 1.83-to-1 ratio favored advancing issues.
Rescue Package for Failed Banks
Last weekend, a joint statement from the Fed, Treasury Department and the Federal Deposit Insurance Corp. (FDIC) said all Silicon Velley Bank and Signature Bank depositors will be able to access to their money starting Mar 13. Moreover, the central bank is in the process of creating a new Bank Term Funding Program in order to safeguarding deposits. Per CNBC, the facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions.
Shares of Regional Banks Rebound
A joint attempt by the Federal Government and the Federal Reserve was able to restore confidence on investors to some extent. SPDR S&P Regional Banking ETF (KRE) gained 2.1% after decaling 9% on Monday and 16% in the prior week.
Consequently, shares of First Republic Bank , PacWest Bancorp and Western Alliance Bancorp. (WAL - Free Report) have jumped 27%, 33.9% and 14.4%, respectively. PacWest and Western Alliance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Yields on Government Bonds Stabilized
As investors’ confidence boosted, market participants shifted their funds to equities. As a result, bond prices fell and yield to maturity steadied. On Mar 14, the yield on the short-term 2-Year U.S. Treasury Note appreciated 30 basis points to 4.33%, after dropping 59 basis points on the previous day. Moreover, the yield on the benchmark 10-Year U.S. Treasury Note rose 14 basis points to 3.68%.
February CPI In line with Expectation
The Department of Labor reported that the consumer price index (CPI) in February rose 0.4% month over month, in line with the consensus estimate. This inflation gauge increased 0.5% in January. Year over year, CPI climbed 6% in February, marking its lowest monthly increased since September 2021.
Core CPI (excluding the volatile food and energy items) 0.5% moth over month in February. The consensus estimate was 0.4%. Core CPI increased 0.4% in January too. Year over year, core CPI surged 5.5% in February, in line with the consensus estimate.