The S&P 500 rose Thursday, as investors bet the worst of the regional bank crisis has passed.
The S&P 500 added 0.57%, closing at 4,050.83. During the session, the broad-market index touched its highest level since March 7. The Nasdaq Composite advanced 0.73% and ended the day at 12,013.47, as tech stocks continued to see renewed investor interest. The Dow Jones Industrial Average added 141.43, or 0.43%, to close at 32,859.03.
The Cboe Volatility Index, Wall Street's preferred measure of how turbulent the S&P 500 will be over the next 30 days, pulled back to the 19 level after reaching 30 in the middle of March. Wall Street's fear gauge is back to where it was when the month began.
Weekly jobless claims increased by 7,000 to 198,000, adding to hopes that the Federal Reserve could slow down its tightening campaign because the labor market is cooling.
Chip stocks such as AMD were among the market's best performers. The VanEck Vector Semiconductor ETF (SMH) climbed 1.4% on Thursday, bringing its year-to-date gain to more than 28%.
Also in tech, shares of Amazon and Apple were higher.
For the month, the Nasdaq Composite is up more than 4%. The S&P 500 has gained 2% as investors shook off the collapse of Silicon Valley Bank and yet another rate increase from the Fed.
To be sure, some investors believe the market may be getting ahead of itself.
"Collectively, financial markets are pricing in the best of both worlds – a recession that allows rates to be low and brings inflation down sharply, yet one that does not have a massively negative effect on corporate earnings," Barclays analyst Ajay Rajadhyaksha wrote in a Thursday note.
Evercore ISI is getting more bullish on shares of Juniper Networks.
Analyst Amit Daryanani upgraded the stock to outperform from in line, saying in a Thursday note that margin expansion should help drive upside for shares and enable the company to accomplish its operating margin goal.
"While macro remains challenging JNPR should see top-line stability driven by healthy backlog ($2.0B+) and Mist/Enterprise ramps," he wrote. "The bigger upside lever should be expanding GM/EBIT margins through CY23 and beyond that could peg EPS run-rate at $3.00+ in CY24."
Key to this thesis is a "much clearer" path to greater than 20% operating margins as commodity and logistics prices ease and Juniper Networks benefits from "pricing tailwinds," Daryanani wrote.
He also views growth within campus networking as a stepping stone on its path toward $3.75 earnings per share over the next five years.
"They should be able to reach 20%+ operating margins even while investing in their enterprise go-to-market strategy," he added.
Along with the upgrade, Evercore ISI lifted its price target to $38 from $34 a share, reflecting about 14% upside from Wednesday's close. The stock gained about 2% Thursday and is up 6.4% for the year.
— Samantha Subin
Technology valuations are hard to like at the moment, according to Sarat Sethi, portfolio manager at Douglas C. Lane & Associates.
"The valuations of some of these companies are remnant to, kind of, where we went back during the pandemic phase," he told CNBC's "Power Lunch." "Investors are saying, 'We're gonna see a slowdown, let's go back to this playbook.'"
Sethi said investors have wondered what sectors are safe after the bank crisis. But he said tech companies may struggle due to high price-to-earnings multiples, and those holdings can crowd out other investments.
He said he does not have as much exposure to large-cap technology stocks as the S&P 500 does.
Sethi also said he trimmed his Nvidia holding a few weeks ago. Nvidia has surged around 87% this year as investors grew increasingly optimistic in stocks with ties to artificial intelligence. That's helped shares regain ground after tumbling 50% in 2022.
— Alex Harring
BMO Capital Markets reiterated its outperform rating on Costco shares following a group investor meeting at the company's headquarters, analyst Kelly Bania said in a note Thursday.
"We came away with an unchanged view that there are no bad times to buy COST shares, only better; and
we remain bullish on Costco's long-term unit expansion outlook," she said.
Bania cited the U.S. consumer, the gas business, new initiatives, ecommerce, retail media and wage inflation as some of the wide array of topics they covered.
"We believe that COST's advantaged business model, consistent execution, increasing connection with its loyal membership base, and potential catalysts make it deserving of its premium valuation, a rarity among retail/consumer staples," Bania added.
— Tanaya Macheel
President Joe Biden urged federal regulators Thursday to take up a set of reforms to safeguard the banking system, following the failures of Silicon Valley Bank and Signature Bank.
The administration wants regulators to take a range of steps to reinstate safeguards for banks with assets between $100 billion and $250 billion and "strengthen oversight and regulation of larger banks so that we are not in this position again," the White House said in a fact sheet Thursday.
All of the reforms can be accomplished under existing law, Biden said.
For more, read the full story here.
— Tanaya Macheel
Here are some stocks that reached record levels Thursday:
Cboe Global Markets, Coty, and Shift4 Payments, meanwhile, rose to 52-week highs.
— Chris Hayes
These are some of the stocks making the biggest midday moves:
— Alex Harring
Oil prices were up more than 1% amid concerns over shrinking U.S. stockpiles and a halt to exports from a region in Iraq.
Brent crude futures rose $1.05 cents, or 1.3%, to $79.33 a barrel. West Texas Intermediate crude rose $1.36 cents, or 1.9%, to $74.33.
Iraq had to halt around 450,000 barrels per day of crude exports, which amounts to around half of one percent of the world's supply from the Kurdistan region, according to Reuters.
— Alex Harring
The real estate sector popped more than 1% to lead the S&P 500 higher Thursday. Boston Properties and Digital Realty were the best-performing stocks in the sector. Consumer discretionary and tech also rose around 1%.
The financials sector was the only sector lower on the day, losing 0.4%.
— Fred Imbert
After the dearth of IPOs in 2022, some may have harbored hopes that conditions would improve this year, but so far it hasn't played out that way. The number of debuts fell 8% globally in the first quarter, with a 61% decline in value from the prior year, according to a report from EY.
"Any initial euphoria at the start of the year was quickly dampened by the unexpected inflation and interest rate outlook, with the mood further stifled by the latest turmoil in the global banking system," wrote EY Global IPO Leader Paul Go.
Demand was particularly weak for deals involving special-purpose acquisition companies in the first quarter. EY said SPAC deal volume hit a six-year low and proceeds fell to levels not seen since the second-quarter of 2016. They predict that should continue, largely due to the terrible performance of the companies that emerged during the SPAC boom.
"Of more than 390 US de-SPAC mergers completed between 2019 and 2023 year-to-date, 90% were trading below US$10, as of 21 March 2023," Go said.
—Christina Cheddar Berk
Bed Bath & Beyond shares tumbled 16% after the beleaguered retailer once again warned it may need to file for bankruptcy as it proposed a $300 million stock offering.
The home goods retailer said the loans it secured last year were downsized, according to a securities filing Thursday. Its revolving loan was decreased to $300 million from $565 million. Meanwhile, the retailer will also have to make monthly interest payments as part of an amendment to its loans.
— Sarah Min, Lillian Rizzo
The VanEck Vector Semiconductor ETF (SMH) rose more than 1% on Thursday, reaching its highest level since April 5, 2022. KLA, ASML, Advanced Micro Devices and On Semiconductor contributed to the gain.
The SMH has been on fire to start the year, rising roughly 30%. That puts it on track for its biggest quarterly gain since the second quarter of 2020.
— Fred Imbert, Nick Wells
Steve Schwarzman, CEO of Blackstone, said the the broad use of social media and smartphones partly contributed to the banking crisis as many clients were able to react quickly with deposit withdrawals, he sad in an interview with Bloomberg News.
"This crisis was caused by people on iPhones and other devices, hearing on social media that some bank might be in trouble," Schwarzman said to Bloomberg News. "They responded with huge withdrawals in a very short period of time, collapsing the bank."
Overall, Schwarzman believes the crisis is an "interim issue" brought on by rapid interest rate hikes, which was worsened by technology. He said both are "solvable problems" for most banks.
— Yun Li
The major averages kicked off Thursday's session with another move higher. The Dow gained more than 100 points, while the S&P 500 and Nasdaq also advanced.
— Fred Imbert
Investors are adding to views that the worst of market turmoil is behind them.
The Cboe Volatility Index, Wall Street's preferred measure of fear in equity markets, declined back down to 19 late Wednesday. The index started March at 19 and reached as high as 30 in the middle of the month.
The increasingly optimistic view is in line with the broader trend of markets this week, with futures signaling Thursday morning that Wall Street is on pace for another positive open.
— Brian Evans
Bigger banks may be benefitting from deposit inflows after the collapse of Silicon Valley Bank, but their earnings could take a hit as regulators continue to unwind the failed bank.
The loss the FDIC has taken on the sales of SVB and Signature Bank will need to backfilled in the form of assessment fees on the remaining banks. Bloomberg News reported Wednesday that the FDIC was considering imposing higher fees primarily on larger banks to help make up the shortfall.
Citi analyst Keith Horowitz looked at the cost of imposing higher fees on the 25 biggest banks, and found that some banks could see their earnings hit by more than 4% next year.
"We see a ~3.5% headwind to 2024 EPS with CFG, PNC, and KEY seeing the greatest impact (4.5%), while GS, MS, and trust banks less impacted." the note said.
— Jesse Pound
Evercore ISI upgraded shares of Walmart to an outperform rating, saying that improving traffic trends make now an ideal time to buy the retailer.
"The traffic turn appears to be building, and with consumers across the demographic spectrum making wallet allocation choices after several years of record nominal retail spending, Walmart is poised to regain share," analyst Greg Melich wrote.
Shares gained more than 1% before the bell.
Read more on the upgrade here.
— Samantha Subin
Analyst Michael Cyprys downgraded Charles Schwab to equal weight from overweight, citing an uncertain earnings outlook.
Stock is down 30% month-to-date, but with limited visibility on multiple variables we are moving to the sidelines," he wrote in a Thursday note. "The SCHW investment thesis has been pushed out and we have less confidence around the timing of an improvement."
Shares dipped more than 1% in the premarket. Check out the full story on CNBC Pro.
— Sam Subin
Analyst Jared Dinges upgraded the cigarette maker to overweight from neutral, saying the recent de-rating of the stock marks an attractive entry point for a global leader spearheading the shift to healthier alternatives to nicotine.
""PMI offers for double-digit EPS [compound annual growth] with meaningful cash flow support (7.4% [free cash flow] yield 2024E), diversified risk (for a tobacco company), and who is just at the precipice of launching its highly successful Heated Tobacco brand," the analyst wrote.
Philip Morris shares rose more than 1% in the premarket. Check out the full story on CNBC Pro.
— Sam Subin
Europe's benchmark Stoxx 600 index opened higher on Thursday and was up 0.8% at 8:30 a.m. in London.
Germany's DAX was up 1%, France's CAC 40 by 0.9% and the U.K.'s FTSE 100 by 0.4%.
All sectors climbed, with retail stocks up 2.5% after clothing group H&M posted a surprise first-quarter profit, boosting the stock by 9.7%.
Banks also continued to shake off recent worries, rising 1.3%.
— Jenni Reid
Shares of Alibaba listed in Hong Kong rose as much as 2.7% in early trade and last traded nearly 1.8% higher after Alibaba executives further clarified the nature of the latest restructuring announcement to split into six units, each with the ability to raise outside funding and go public.
CEO Daniel Zhang told investors on a Thursday morning conference call, "Alibaba will be more of the nature of an asset and capital operator than a business operator, in relation to the business group companies."
He added that the units announced in the restructuring will have their own CEOs and boards and Alibaba will retain boardroom seats in the short-term.
After the restructuring process takes place and the separate entities go public, Alibaba will "continue to evaluate the strategic importance of these companies" CFO Toby Xu said on the call, adding that it "will decide whether or not to continue to retain control."
– Jihye Lee