- Regional banks rebound after bloody sell-off
- US employers create 253,000 jobs in April
- Indices: Dow up 1.7%, S&P 500 up 1.9%, Nasdaq up 2.3%
May 5 (Reuters) – US stocks rallied on Friday, with the Dow posting its biggest one-day percentage gain since January 6, as shares of Apple rose more than 4% on positive results and US jobs data indicated a resilient reading labor market indicated .
Adding to the bullish momentum, regional bank stocks rebounded from declines related to the collapse of First Republic Bank. Analysts upgraded a number of lenders they thought were oversold.
PacWest Bancorp (PACW.O) is up 81.7% and Western Alliance Bancorp (WAL.N) is up 49.2%, while the KBW Regional Bank Index (.KRX) is up 4.7%.
Apple’s (AAPL.O) quarterly results also cheered investors worried about a possible recession. Shares of the iPhone maker hit the highest level in about nine months, and the stock ended up 4.7%, its biggest one-day percentage gain since November.
The stock was the biggest positive impact on all three major US stock indexes.
The US Labor Department report showed that job growth accelerated in April and wage increases rose solidly, suggesting the labor market has remained strong despite the Federal Reserve’s recent rate hikes.
The jobs report “is about the state of the US economy and what we’ve seen today suggests it’s in a better position than previously anticipated,” said Kristina Hooper, chief global market strategist at Invesco in New York.
Investors have worried that rate hikes could eventually push the economy into recession.
The Dow Jones Industrial Average (.DJI) was up 546.64 points, or 1.65%, to 33,674.38, the S&P 500 (.SPX) was up 75.03 points, or 1.85%, to 4,136.25 and the Nasdaq Composite (.IXIC) is up 269.02 points, up 2.25% at 12,235.41.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 4, 2023. REUTERS/Brendan McDermid
The Cboe Volatility Index (.VIX) posted its biggest daily decline since March 16.
However, the Dow and S&P 500 continued to post losses for the week, while the Nasdaq ended the week with a slight gain.
On Wednesday, the Federal Reserve raised interest rates by 25 basis points, as expected, but Fed Chair Jerome Powell noted it is too early to say with certainty that the cycle of interest rate hikes is over as inflation remains the main concern .
Apple drove gains for other tech stocks, but all 11 major S&P sectors were higher on the day.
The estimated decline in S&P 500 first-quarter earnings has narrowed since the start of the earnings season and now stands at just 0.7% year-on-year, data from Refinitiv showed on Friday.
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Volume on US exchanges was 10.57 billion shares compared to the average of 10.70 billion for the entire session over the past 20 trading days.
Rising issues predominated on the NYSE at a 4.95 to 1 ratio; on the Nasdaq, a 2.75 to 1 ratio favored movers.
The S&P 500 posted 13 new 52-week highs and 3 new lows; the Nasdaq Composite posted 87 new highs and 104 new lows.
Reporting by Ankika Biswas in Bengaluru; Edited by Shounak Dasgupta
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