Stock Market Today: Stocks Rally on Credit Suisse, First Republic Bank Rescue News
Reports that major U.S. banks would step in to help First Republic Bank helped stocks swing higher Thursday.
Stocks opened lower Thursday before reversing course mid-morning and rallying into the close.
Sparking the turnaround were reports that several of the country's largest banks – including blue chip stocks JPMorgan Chase (JPM) and Bank of America (BAC) – will provide beaten-down regional lender First Republic Bank (FRC) with a massive injection of deposits. Also lifting sentiment was news that Swiss National Bank offered a lifeline to Credit Suisse (CS).
It's been a chaotic week in the financial sector sparked by weekend headlines surrounding the failures of Silicon Valley Bank and Signature Bank. While this has created substantial volatility among bank stocks, the broader market has been fairly resilient. Still, today's positive headlines allowed investors to breathe a sigh of relief that the disruption could be contained.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
As a result, the Nasdaq Composite jumped 2.5% to 11,717, the S&P 500 soared 1.8% to 3,960, and the Dow Jones Industrial Average gained 1.2% to 32,246.
All but one sector – real estate (unchanged) – finished higher, with technology (+2.8%) and communications services (+2.2%) leading the way. Financials (+1.9%) were another solid gainer, thanks to strong price action seen across the sector.
FRC stock, for one, was down more than 36% at its session low before ending the day up 10.3%. Boosting the volatile bank stock was news that JPM, BAC, Wells Fargo (WFC) and Citigroup (C) will deposit $5 billion apiece into First Republic. Several other banks will reportedly commit smaller amounts to the rescue effort.
Elsewhere, CS stock was up 18% at its session high after the bank secured a $50 billion loan from Swiss National Bank in what it called "decisive action to pre-emptively strengthen its liquidity." Shares ended the day down 0.2%, though. Anxiety around the strength of the Swiss bank – sparked in part by the recent closures of SVB and Signature Bank – sent its shares tumbling on Wednesday.
Is tech the new safety play?
Are tech stocks the new safety plays? Tech and tech-related sectors like communications services have shown relative strength throughout the first quarter. Looking at the numbers, the tech-heavy Nasdaq is up more than 11% for the year-to-date vs a roughly 3% gain for the broader S&P 500 and a 3% decline for the blue-chip Dow.
There are two potential reasons for the outperformance, says Carrie King, global deputy chief investment officer of BlackRock Fundamental Equities. One is possible bargain hunting after a significant underperformance from tech and tech-related stocks last year. Another is the notable cost-cutting that's been underway, including massive layoffs.
For investors looking to play the hot hand of the market, there are plenty of ideas, including those found among the best tech stocks and the best communication services stocks. As for industry-specific opportunities, these are the best semiconductor stocks and the best AI stocks to buy now.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Short-Term Rentals: 10 Things to Know Before you Book on Sites Like Airbnb and VRBO
A successful short-term rental stay requires knowing the ins and outs of booking sites. Here's our take on Trip Advisor, Expedia, Booking.com, VRBO and Airbnb.
By Laura Vecsey Published
-
Become a Digital Nomad: An Early Retirement Lifestyle
Embrace a digital nomad lifestyle to satisfy your wanderlust. Here are tips from an ultramarathon runner, a professional blogger and a financial planner.
By Jacob Schroeder Published
-
Stock Market Today: Dow, S&P 500 Hit New Highs on Black Friday
Sentiment was bullish on the final trading session of November, with chip stocks leading the charge.
By Karee Venema Published
-
Stock Market Today: Stocks Stall on Tariff Talk, Inflation Data
A slew of economic news and some tough posturing on trade put a damper on equities.
By Dan Burrows Published
-
Stock Market Today: The S&P 500 Reclaims the 6K Level
Investors see Scott Bessent as a safe shepherd of the economy as the president-elect burnishes his "Tariff Man" reputation.
By David Dittman Published
-
Stock Market Today: Stocks Enjoy a Bessent Boost
The Dow closed at an all-time high as investors welcomed Donald Trump's Treasury secretary nominee.
By David Dittman Published
-
Stock Market Today: The Dow Leads an Up Day for Stocks
Boeing, American Express and Nike were the best Dow stocks to close out the week.
By Karee Venema Published
-
Stock Market Today: Stocks End Higher in Whipsaw Session
The main indexes were volatile Thursday with Nvidia earnings in focus.
By Karee Venema Published
-
Stock Market Today: Stocks Close Mixed Amid War Angst, Nvidia Anxiety
Markets went into risk-off mode amid rising geopolitical tensions and high anxiety ahead of bellwether Nvidia's earnings report.
By Dan Burrows Published
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical Tension
The main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
By David Dittman Published