Stock market rises to weekly highs; Warren Buffett makes big move

The stock market traded higher on Thursday after regional banks rebounded. Big Tech and the Nasdaq composite resisted the early downside tide and traded higher, while small caps shed opening losses. Regional bank stocks got some relief as Bank of the First Republic (FRC) may get a new lifeline.


Testifying before the Senate Finance Committee Thursday morning, Treasury Secretary Janet Yellen emphasized that the banking system remains strong.

JPMorgan Chase (J.P.M.), Morgan Stanley (MS) and other major banks are in talks about a possible deal with First Republic Bank. This includes a major capital injection into the stressed regional bank.

The CME FedWatch Tool now expects an 83% chance of a rate hike of 25 basis points at the March meeting. Almost 17% do not expect a rate change.

NYSE and Nasdaq volume was lower than Wednesday afternoon.

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

The Russell 2000 was up 0.7% early Thursday after losing more than 1%. The 15% regional banking component weighed on the small-cap index.

The Dow and S&P 500 tested resistance on their 50- and 200-day moving averages, while the Nasdaq recaptured those critical price levels.

The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) added 1.7%. The Innovator IBD 50 ETF (FFTY) gained 2%.

The yield on 10-year US Treasury bills rose 2 basis points to 3.52%.

Economic data moves stock market

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

European stock markets rose, with the German DAX up 1.8% and the Paris CAC up 2.5%. The London FTSE gained 1.1% in afternoon trading.

The European Central Bank raised interest rates by 50 basis points, bringing the policy rate to 3% as expected.

Initial jobless claims for the week ending March 11 came in at 192,000 versus Econoday’s 205,000 consensus, and lower than last week’s revised 212,000. The data shows continued strength in the labor market.

Warren Buffett buys more OXY; First Republic Stock Sinks

Warren Buffetts Berkshire Hathaway (BRKB) bought more than 7.88 million shares from Western petroleum (OXY), valued at nearly $467 million. OXY rose 1.8% on the news.

PagerDuty (PD) popped more than 16% after reporting a beat on the top and bottom lines of Q4.

Adobe (ADBE) gained 5.6% after reporting better-than-expected quarterly earnings and sales at the end of February. It also raised its full-year revenue expectation on Wednesday after the bell.

Quarterly earnings per share grew 13%, while revenue increased 9%, driven by Digital Media revenue growth of 9% and Digital Experience revenue growth of 11%. Analysts expect annualized EPS growth of 12% in 2023 and 14% in 2024.

Swiss credit (CS) rose 3% after agreeing to borrow up to nearly $54 billion from the Swiss National Bank, propelling the bank.

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

Bank of the Western Alliance (WAL) recovered from losses, up 2.1% after a credit rating agency downgraded the troubled bank’s debt and deposit ratings to negative.

The SPDR Select Regional Bank ETF (KRE) offset early losses and rose 0.9%. The SPDR Select Financial (XLF) ETF gained 1.2%.

Stock market today: sports shop breaks out

Facebook and Instagram older Meta platforms (META) rose 1.3%. Shares moved on news of potential US and UK restrictions on Chinese social media competitor TikTok.

Shares broke out on Wednesday, reaching the buy point of 197.26 from a flat base. The relative strength line reached a 52-week high, as indicated by the blue dot on the weekly MarketSmith chart. The share on social media is an IBD SwingTrader position.

Snapchat parent SNAP (SNAP) gained 6.7% in Thursday’s stock market on TikTok news.

Academy Sport & Outdoor (ASO) popped 9% in heavy volume. Shares broke out of a flat base to reach the buy point of 63.99, following better-than-expected Q4 EPS and lower-than-expected sales.

Management gave full-year net sales numbers above analyst expectations. The relative strength line of sporting goods retail reached a 52-week high on the weekly chart.

Five below (FIVE) fell 2.1% after reporting better-than-expected Q4 sales, but gave lower Q1 EPS expectations.

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


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