U.S. stocks post biggest gain in 5 weeks
Banking stocks rally after passing Fed’s stress tests
U.S. stocks recorded the biggest gain in more than a month as expectations for a rate hike were pushed back following disappointing data on retail sales.
Monthly sales at U.S. retailers fell for the third consecutive month in February, sparking concerns about consumers’ ability to keep the economic engine going.
The gains propelled the S&P 500 and Dow industrials back into positive territory for the year.
The S&P 500 SPX, +1.26% closed 25.71 points, or 1.3%, higher at 2,065.95, with nine of its 10 main sectors finishing with gains. Financials led the way, with the sector gaining 2.2%. The Dow Jones Industrial Average DJIA, +1.47% jumped 259.83 points, or 1.5%, to 17,895.22, with 26 of its 30 members ending in positive territory. It was the strongest daily rise for both the S&P and the Dow since Feb. 3.
The Nasdaq Composite COMP, +0.89% ended the day up 43.35 points, or 0.9%, at 4,893.29.
Ahead of the opening bell, investors digested mixed economic data. Disappointing monthly retail sales gave investors hope that the Fed will stay accommodative for longer, pushing expectations for the rate hike further in the year, according to analysts.
“Today’s bounce is indicative of a shift in expectations, namely that the Fed will delay rate hikes, given poor retails sales figures,” said Dan Greenhaus, chief global strategist at BTIG LLC.
“Over the past several sessions markets traded poorly as investors came to grips with the idea that the Fed will begin the tightening sooner rather than later. That is the reason the dollar has been strengthening,” Greenhaus said.
On Thursday, data showed retail sales slumped in February for the third month in a row, missing forecasts for a rise. Falling retail sales indicate that consumers aren’t spending the windfall from lower energy prices.
Weekly jobless claims slid after a recent spike, in a sign that the labor market is still improving at a healthy pace. Meanwhile, U.S. import prices climbed last month for the first time in nine months.
Although the February monthly jobs report last Friday came in much stronger than expected, other indicators, such as inventories and factory orders, point to a slowdown. That has sparked a guessing game among investors about the timing of the first rate hike since 2006.
Stocks to watch: Shares of Citigroup Inc. C, -0.09% jumped 3.3% after it was among 28 of 31 big banks that got the Fed’s approval to return capital to investors.
Shares of Acadia Pharmaceuticals Inc. ACAD, +0.29% plunged 22% after the drug maker said late Wednesday it would delay submitting a new-drug application for Nuplazid until later this year.
Shares of Box Inc. BOX, -1.70% dived 11% after the company, which launched its IPO in January, posted a wider-than-expected loss on higher costs.
Krispy Kreme Doughnuts Inc. KKD, -6.54% fell 6.5% after the company posted disappointing sales growth.
Other markets: Across global markets, the Nikkei 225 index NIK, +1.39% rallied 1.4% to a 15-year high, while the Stoxx Europe 600 SXXP, -0.03% finished flat. Theeuro EURUSD, -0.55% dipped to a fresh 12-year low of around $1.0494 during Asia trade, but moved back up to around $1.0639, while the dollar USDJPY, +0.18% also eased against the yen.
Adding to the growing list of central banks cutting rates, South Korea surprised markets by easing its base rate a quarter of a percentage points to a record low of 1.75%. That comes on the heels of a rate cut by Thailand’s central bank Wednesday.
U.S. crude prices CLJ5, +0.09% fell and settled 2.3% lower at $47,05 after a ninth straight weekly increase in U.S. supplies. Gold prices GCJ5, +0.49% logged their first gain in three sessions, adding $1.30, or 0.1% to $1,151.90.
Source: marketWatch – U.S. stocks post biggest gain in 5 weeks
