stock market sees red; Bank stocks are under pressure again

The stock market traded higher Thursday morning after regional banks rallied. Big Tech and the Nasdaq Composite defied the early move to trade higher, while small caps pared opening losses. Regional bank stocks are back in the hot seat.


The CME FedWatch tool now expects a 76 percent chance of a 25 basis point rate hike at the March meeting. Almost 24% do not expect interest rates to change.

NYSE and Nasdaq volume was lower than at the same time on Wednesday.

The Dow Jones Industrial Average gained 0.2%, while the S&P 500 rose 0.5%. The Nasdaq Composite moved solidly into positive territory.

The Russell 2000 traded 0.6% higher after shedding more than 1% early Thursday. The 15% share of regional banks weighed on the small-cap index.

The Dow and S&P 500 remain below their 50- and 200-day moving averages, while the Nasdaq reclaimed the 200-day moving average but faced resistance at the 50-day moving average.

The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) 0.4% added. The Innovator IBD 50 ETF (FFTY) fell 0.2%.

The US 10-year Treasury yield fell 11 basis points to 3.38%.

economic data

Crude Oil jumped green, as high as $67.90 a barrel. Bitcoin futures are up 2% to $25,010.

European equity markets rose, with Germany’s DAX up 0.8% and Paris’ CAC up 1.2%. London’s FTSE gained 0.5% in afternoon trade.

The European central bank raised interest rates by 50 basis pointsthe key interest rate is expected to be 3%.

Initial jobless claims for the week ended March 11 were 192k versus Econoday consensus of 205k and lower than last week’s revised 212k. The data shows continued strength in the labor market.

Warren Buffett buys more OXY; Stocks of the First Republic fall

Warren Buffett Berkshire Hathaway (BRKB) bought over 7.88 million shares of Western Petroleum (OXY), valued at nearly $467 million. OXY rose 0.3% on the news.

PagerDuty (PD) surged over 15% after it reported a hit to the top and bottom lines of the fourth quarter.

Adobe (ADBE) gained 3.8% after reporting better-than-expected quarterly earnings and sales at the end of February. It also raised full-year sales guidance after the bell on Wednesday.

Quarterly earnings per share rose 13% while revenue rose 9%, boosted by 9% growth in digital media revenue and 11% increase in Digital Experience business segment revenue. Analysts are forecasting annualized EPS growth of 12% in fiscal 2023 and 14% in 2024.

CreditSuisse (CS) fell another 1.4% after agreeing borrow up to $54 billion from the Swiss National Bank, which keeps the bank afloat.

Bank of the First Republic (FRC) dropped by over 34% Bloomberg News that the failed bank is looking at strategic options, including a possible sale of the company.

Western Alliance Bank (WHALE) fell over 14% after a credit rating agency put the troubled bank’s debt and deposit ratings on a negative watch.

The SPDR Select Regional Bank ETF (KRE) lost 3.5% as the sector came under more pressure. The SPDR Select Financial (XLF) ETF fell 2.2%.

Stock market today: sports retailer breaks out

Parents of Facebook and Instagram meta platforms (META) rose by 0.5%. Shares moved on news of potential US and UK restrictions on Chinese social media competitor TikTok.

The shares broke out on Wednesday and hit the 197.26 buy point from a flat basis. The line of relative strength hit a 52-week high, as indicated by the blue dot on MarketSmith’s weekly chart. The social media stock is one IBD Swing Trader Position.

Parent of social media site Snapchat SNAP (SNAP) gained 3% in the stock market on Thursday on the TikTok news.

Academy Sport & Outdoor (ASO) gaped higher before retreating and is now up 1.7%. Shares broke out of a flat base and hit the buy point of 63.99 after the Academy reported better-than-expected Q4 EPS and missing sales estimates.

Management released full-year net sales that exceeded analysts’ expectations. The relative strength line of the sporting goods retailer hit a 52-week high on the weekly chart.

five below (FIVE) fell 4.6% after reporting better-than-expected Q4 sales but gave a lower Q1 EPS forecast.

Follow Kimberley Koenig on Twitter for more stock news @IBD_KKönig.


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