The US stock market finished session notably higher after clawing back early weakness on Thursday, 16 March 2023, as risk sentiments underpinned after a consortium of major US private banks announced a $30 billion rescue package for embattled lender First Republic.
At the close of trade, the Dow Jones Industrial Average index advanced 371.98 points, or 1.17%, to 32,246.55. The S&P500 index climbed up 68.35 points, or 1.76%, to 3,960.28. The tech-heavy Nasdaq Composite Index increased 283.22 points, or 2.48%, to 11,717.28.
Total 9 of 11 S&P500 sectors ended higher. Information technology was top performing sector, rising 2.82%, followed by communication services (up 2.77%), financials (up 1.94%), and consumer discretionary (up 1.88%) sectors.
The relief rally on the Wall Street was chiefly due to news that a consortium of major US private banks announced a $30 billion rescue package for embattled lender First Republic. The package announced by JPMorgan Chase, Morgan Stanley and nine other giants consisted of $30 billion uninsured deposits. The aim was to show their confidence in First Republic and in the country's banking system.
Meanwhile, news that Credit Suisse will borrow up to $54 billion from the Swiss central bank to shore up liquidity and investor confidence also helped ease recent concerns about turmoil in the banking sector.
Investors are looking ahead to the Federal Reserve's meeting next week to see how the central bank will proceed in its fight against inflation in light of the shakeup in the banking sector.
Among individual stocks, Credit Suisse Group shares were up 3.9% after it said it got a credit line up to $54 billion from the Swiss National Bank, helping to bolster liquidity.
Shares FedEx were up 9% after package-shipping company reported better-than-expected earnings in its fiscal third quarter and raised its earnings forecast for the full year.
ECONOMIC NEWS: The Labor Department released a report showing initial jobless claims fell to 192,000, a decrease of 20,000 from the previous week's revised level of 212,000.
A separate report released by the Labor Department showed import prices dipped by 0.1% in February after falling by a revised 0.4% in January. The report also said import prices in February were down by 1.1% compared to the same month a year ago.
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