Stock market climbs to weekly highs; Warren Buffett takes a big step

The stock market traded higher on Thursday after regional banks bounced. Big Tech and the Nasdaq Composite defied the early move to trade higher, while small caps pared opening losses. Regional bank stocks got some relief since Bank of the First Republic (FRC) may get a new lifeline.


Treasury Secretary Janet Yellen testified before the Senate Treasury Committee on Thursday morning, insisting the banking system remains strong.

JPMorgan Chase (JPM), MorganStanley (MS) and other major banks are in talks over a potential deal with First Republic Bank. This would involve a large capital injection for the ailing regional bank.

The CME FedWatch tool now sees an 83% probability of a 25 basis point rate hike at the March meeting. Almost 17% do not expect interest rates to change.

NYSE and Nasdaq volume was lower than Wednesday midday.

The Dow Jones Industrial Average gained 0.4%, while the S&P 500 rose 1.2%. The Nasdaq Composite gained 1.9%.

The Russell 2000 traded 0.7% 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 tested resistance at their 50- and 200-day moving averages, while the Nasdaq reclaimed those critical price levels.

Tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) is up 1.7%. Innovator IBD 50 ETF (FFTY) is up 2%.

The US 10-year Treasury yield edged up 2 basis points to 3.52%.

Economic data moves the stock market

Crude oil rose 0.1% to $67.62 a barrel. Bitcoin futures are up 1.7% to $24,900.

European equity markets rose, with Germany’s DAX up 1.8% and Paris’ CAC up 2.5%. London’s FTSE gained 1.1% in afternoon trade.

The European Central Bank hiked interest rates by 50 basis points and raised the key interest rate to 3% as expected.

Initial jobless claims for the week ended March 11 came in at 192k versus Econoday’s 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 1.8% on the news.

PagerDuty (PD) surged over 16% after reporting a hit to the top and bottom lines of the fourth quarter.

Adobe (ADBE) gained 5.6% 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 increased 9%, boosted by Digital Media revenue up 9% and Digital Experience revenue up 11%. Analysts are forecasting annualized EPS growth of 12% in 2023 and 14% in 2024.

CreditSuisse (CS) rose 3% after agreeing to borrow up to $54 billion from the Swiss National Bank to keep the bank afloat.

Bank of the First Republic (FRC) fell over 16% after Bloomberg reported that the failed bank is looking at strategic options, including a possible sale of the company.

Western Alliance Bank (WAL) rebounded from losses to gain 2.1% after a rating agency put the troubled bank’s debt and deposit ratings on negative watch.

SPDR Select Regional Bank ETF (KRE) pared early losses and rose 0.9%. The SPDR Select Financial (XLF) ETF is up 1.2%.

Stock market today: sports retailer breaks out

Parents of Facebook and Instagram meta platforms (META) rose 1.3%. 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 an IBD SwingTrader position.

Snapchat Parents SNAP (SNAP) gained 6.7% in the stock market on Thursday on the TikTok news.

Academy Sport & Outdoor (ASO) popped 9% in strong volume. Shares broke out of a flat base and hit the 63.99 buy point after better than expected Q4 EPS and lower than forecast selling.

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 2.1% after it reported 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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