By Caroline Valetkevitch
NEW YORK (Reuters) – U.S. stocks rallied on Wednesday, with all three major indices ending the day up at least 1%, as upbeat prospects from Micron Technology and others eased some concerns about the health of the economy.
In a sign of possible further strength, the S&P 500 also closed above its 50-day moving average for the first time since March 6, before the onset of the banking crisis, and the CBoe Volatility Index, Wall Street’s fear gauge, closed at that lowest level As of March 8th.
Micron’s shares soared 7.2%, boosting the Nasdaq and S&P 500, and leading gains in the PHLX semiconductor index, which closed 3.3% higher.
The memory chipmaker late Tuesday forecast third-quarter sales would fall in line with Wall Street expectations, while giving a rosy outlook for 2025 as artificial intelligence will boost sales.
Adding to the optimism, Lululemon Athletica Inc rose 12.7% after an upbeat full-year earnings forecast.
“We had some good insights into the economics of some companies,” said King Lip, chief investment strategist at BakerAvenue Wealth Management in San Francisco.
“Micron is something of a microcosm of the global economy because their chips go into so many different industries and sectors.
Lululemon surges after strong repeat, https://fingfx.thomsonreuters.com/gfx/mkt/dwpkdkmqkvm/Pasted%20image%201680108260963.png
The majority of S&P 500 companies will begin reporting on the first quarter in mid-April.
Investors are also trying to gauge whether the turmoil in the banking system is abating and what that could mean for Federal Reserve policy.
The Dow Jones Industrial Average was up 323.35 points, or 1%, to 32,717.6, the S&P 500 was up 56.54 points, or 1.42%, to 4,027.81, and the Nasdaq Composite was up 210.16 points, or 1, 79% to 11,926.24.
“People are getting a little more comfortable with each passing day since we had the outages,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
The story goes on
The banking turmoil that began in early March with the collapse of Silicon Valley Bank caused a rapid sell-off in sector stocks and fueled jitters about the strength of the economy.
On Monday, US regional lender First Citizens BancShares bought Silicon Valley Bank’s assets.
Michael Barr, the Fed’s vice chairman for oversight, told Congress that the blame for the failure of the Silicon Valley bank rests with bank executives.
Investors are awaiting personal consumption spending data on Friday for more clues on inflation. The Fed has hiked interest rates to lower inflation.
Rising issues predominated on the NYSE at a 3.86 to 1 ratio; on the Nasdaq, a 2.15 to 1 ratio favored movers.
The S&P 500 posted 9 new 52-week highs and no new lows; the Nasdaq Composite posted 69 new highs and 135 new lows.
Volume on US exchanges was 10.61 billion shares compared to the average of 12.73 billion for the entire session over the last 20 trading days.
(Reporting by Caroline Valetkevitch; Additional reporting by Amruta Khandekar and Ankika Biswas; Editing by Dhanya Ann Thoppil and Vinay Dwivedi and Aurora Ellis)
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