Tech Rally Lifts Major Averages On Wall Street

Barry Adams
29 Mar, 2023
New York City

Benchmark indexes advanced on Wall Street and investors looked beyond banking system worries. 

Stocks opened higher after banking crisis worries eased and Treasury yields held stable. 

Federal Reserve's vice chairman supervision  Michael Barr said financial meltdown at the failed Silicon Valley Bank resulted from poor risk management. 

Barr's comments soothed market nerves for now and investors surmised that the U.S. banking system may be able to avoid a wider contagion. 

Tech stocks rallied on Wall Street following the surge in Alibaba Group in Hong Kong and SoftBank in Tokyo. 

Alphabet Inc, Amazon.com Inc, Meta Platforms and Apple Inc advanced between 1% and 2.5%.  

 

Weekly Mortgage Applications Index Rebounded  

Mortgage applications volume increased 2.9% in the week ended March 24, the fourth weekly increase in a row, according to the weekly survey released by the Mortgage Bankers Association on Wednesday. 

“Application activity increased as mortgage rates declined for the third straight week. 

The 30-year fixed rate declined to 6.45%, the lowest level in over a month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

The Refinance Index increased 5% from the previous week and was 61% lower than the same week one year ago. 

The seasonally adjusted Purchase Index increased 2% from one week earlier and the unadjusted index increased 2% compared with the previous week and was 35% lower than the same week a year ago.

 

Indexes & Yields 

The S&P 500 index increased 1.02% to 4,011.67 and the Nasdaq Composite index increased 1.3% to 11,868.15. 

The yield on 2-year Treasury notes increased 6 basis points to 4.13%, 10-year Treasury notes rose 4 basis points to 3.60% and 30-year Treasury bonds increased 2 basis points to 3.81%. 

Crude oil increased 82 cents to $74.07 a barrel and natural gas price edged down 4 cents to $2.10 a thermal unit. 

 

U.S. Movers 

UBS Group AG increased 3.5% to $19.95 after the company recalled former chief executive Sergio Ermotti to manage the recent acquisition of Credit Suisse. 

Ermotti served as chief executive for nine years to October 2020 and is currently Chairman of Swiss Re.

Ermotti will replace current CEO Ralph Hamers on April 6 and Hamers will advise the company during the transition. 

Lululemon Athletica increased 14.4% to $365.05 after the athleisure retailer reported a surge in comparable same store sales in the fourth quarter. 

Revenue in the fourth quarter ending in January increased 30% to $2.8 billion on comparable sales surge of 27%. 

Net income in the quarter dropped to $119.8 million from $434.5 million and diluted earnings per share fell to 94 cents from $3.37 a year ago. 

The company estimated fiscal first quarter 2023 net revenue in the range of $1.890 billion to $1.930 billion, representing growth of  approximately 18%. 

Diluted earnings per share are expected to be in the range of $1.93 to $2.00 for the quarter. 

Micron Technology Inc advanced 6.2% to $63.0 after the semiconductor manufacturer reported smaller-than-anticipated quarterly loss. 

Revenue in the fiscal second quarter ending on March 2 declined to $3.69 billion from $4.09 billion in the prior quarter and $7.79 billion a year ago. 

The company swung to a loss of $2.3 billion from a profit of $2.3 billion and diluted earnings per share was ($2.12) from $2.0 a year ago. 

The company guided revenue in the third quarter of $3.7 billion and diluted loss per share of $1.79. 

“Customer inventories are getting better, and we expect gradual improvements to the industry’s supply-demand balance," said chief executive Sanjay Mehrotra.