Stock Market Hits Weekly Highs; Warren Buffett takes a big step forward

The stock market traded higher on Thursday after regional banks rebounded. Big Tech and the Nasdaq composite bucked the early bearish wave, trading higher, while small caps shed their opening losses. Regional bank stocks saw some relief Bank of the First Republic (FRC) can get a new lifeline.


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

JPMorgan Chase (JMP), Morgan Stanley (MS) and other major banks are in talks for a potential deal with First Republic Bank. This would include a large injection of capital into the struggling regional bank.

The CME tool FedWatch now expects an 83% chance of a 25 basis point rate hike at the March meeting. Nearly 17% expect there to be no change in rates.

NYSE and Nasdaq volume was lower than midday Wednesday.

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 up 0.7% after losing more than 1% on Thursday morning. The regional banking component of 15% 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 recovered to those critical price levels.

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

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

Economic data moves the stock market

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

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

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

Initial jobless claims for the week ending March 11 came in at 192,000 against Econoday’s consensus of 205,000, 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

At Warren Buffett’s Berkshire Hathaway (BRKB) purchased more than 7.88 million shares of western oil (OXY), worth nearly $467 million. OXY rose 1.8% on the news.

pager (PD) jumped more than 16% after reporting a beating in fourth-quarter earnings.

Adobe (ADBE) gained 5.6% after reporting better-than-expected earnings and sales for the quarter ended February. It also raised its full-year revenue forecast on Wednesday after the bell.

Quarterly EPS increased 13% while sales increased 9%, driven by digital media revenue up 9% and digital experience sales up 11%. Analysts forecast 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, keeping the bank afloat.

Bank of the First Republic (FRC) fell more than 16% after Bloomberg reported the bankrupt bank was looking at strategic options, including a potential sale of the business.

Western Alliance Bank (WAL) recouped its losses, up 2.1% after a credit rating agency placed the troubled bank’s debt and deposit ratings on negative watch.

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

Stock market today: Sports retailer is having a blast

Parent Facebook and Instagram Metaplatforms (META) increased by 1.3%. Shares moved following news of potential restrictions in the US and UK on Chinese social media competitor TikTok.

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

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

Academy Sports and Outdoors (ASO) jumped 9% in large volume. Shares came off a flat base, hitting the buy point of 63.99, after better-than-expected fourth-quarter EPS and weaker-than-expected sales.

Management reported full-year net sales figures above analysts’ expectations. The relative strength line for sporting goods retail stocks hit a 52-week high on the weekly chart.

five below (FIVE) fell 2.1% after reporting better-than-expected fourth-quarter sales but gave lower first-quarter EPS guidance.

Follow Kimberley Koenig for more stock insights on Twitter @IBD_KKoenig.


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