U.S. Stocks Show Significant Turnaround After Seeing Early Weakness

After an early move to the downside, stocks have turned mostly higher over the course of the trading session on Thursday. The major averages have climbed well off their lows of the session and into positive territory.

Currently, the major averages are just off their highs of the session. The Dow is up 123.63 points or 0.4 percent at 31,998.20, the Nasdaq is up 169.29 points or 1.5 percent at 11,603.34 and the S&P 500 is up 36.08 points or 0.9 percent at 3,928.01.

The turnaround on Wall Street was partly due to a report from the Wall Street Journal indicating
JPMorgan Chase (JPM), Morgan Stanley (MS) and several other big banks are discussing a potential deal with First Republic Bank (FRC).

People familiar with the matter told the Wall Street Journal the potential deal could include a sizable capital infusion to shore up the beleaguered lender.

First Republic is working on various potential options including a capital raise that could take various forms, the people told the journal.

The strength on Wall Street may also reflect bargain hunting following recent weakness, which reflected concerns about turmoil in the financial sector.

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended March 11th.

The report said initial jobless claims fell to 192,000, a decrease of 20,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to slip to 205,000 from the 211,000 originally reported for the previous week.

A separate report released by the Labor Department showed import prices edged slightly lower in the month of February.

The Labor Department said import prices dipped by 0.1 percent in February after falling by a revised 0.4 percent in January.

Economists had expected import prices to slip by 0.2 percent, matching the decrease originally reported for the previous month.

The report also said import prices in February were down by 1.1 percent compared to the same month a year ago, reflecting the first annual decrease since December 2020.

Semiconductor stocks have moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 2.2 percent.

Substantial strength has also emerged among software stocks, as reflected by the 2.1 percent surge by the Dow Jones U.S. Software Index.

Retail, networking and computer hardware stocks have also moved to the upside, while gold and tobacco stocks are seeing considerable weakness.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.8 percent, while China’s Shanghai Composite Index slumped by 1.1 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has surged by 1.8 percent, the German DAX Index is up by 1.2 percent and the U.K.’s FTSE 100 Index is up by 0.8 percent.

In the bond market, treasuries are extending the strong upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 3.453 percent.

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