Nasdaq, S&P, Dow jump, helped by technology stocks, rebound in regional banks (SP500)

U.S. stocks on Thursday surged in late afternoon trading, helped by a rebound in regional banks which rose after a report that major financial names were ready to step in and bolster First Republic Bank.

The tech-heavy Nasdaq Composite (COMP.IND) was up 2.02% to 11,664.87 points. The benchmark S&P 500 (SP500) was higher by 1.37% to 3,945.33 points, while the blue-chip Dow (DJI) added 0.87% to 32,151.36 points.

Wall Street’s major averages had opened lower and seesawed after, as traders digested the European Central Bank’s (ECB) 50 basis point rate hike, despite talk of a smaller rate hike after the recent turmoil in the financial sectors. The averages turned positive late in the morning and have since extended their gains.

An advance in shares of Intel (INTC) and other technology stocks also helped lift markets. Meanwhile, shares of First Republic Bank (FRC) made a significant rebound, reversing course and pushing higher. Bloomberg reported that a host of banks including JPMorgan (JPM), Citi (C), Bank of America (BAC), Wells Fargo (WFC), and Morgan Stanley (MS) were in talks to provide First Republic with $30B in deposits.

Nine of the 11 S&P sectors were now trading in the green, with Communication Services and Technology the top gainers. Real Estate and Consumer Staples were the two losers.

Europe’s central bank hiked interest rates by 50 basis points. Earlier, ECB President Christine Lagarde had signaled that recent volatility in banking stocks had boosted chances of a smaller 25 basis point hike.

According to the CME FedWatch tool, markets are now pricing in a 72.3% probability of a 25 basis point hike at the Federal Reserve’s monetary policy committee meeting next week. The probability of no hike is at 27.7%.

Credit Suisse (CS) remained a hot topic of discussion, after the lender secured a $54B loan from the Swiss central bank and its top shareholder said that the bank would not need more capital. European markets calmed after slumping on Wednesday.

Markets had ended mixed in the previous session, weighed down by worries over the global financial system amid the Credit Suisse (CS) saga. Swiss regulators rushed to provide support to the country’s second-largest bank in the form of a $54B lifeline.

“The financial storms from across the Atlantic have exposed some faultlines in the more challenged financial business models that were evident months ago. European banks face neither the aftermath of speculative bubbles popping nor a liquidity crisis resulting from stretched asset-liabilities. Perversely, observing Eurozone labor markets would suggest that the ECB has much more work to do in containing wages and core CPI,” Jefferies’ Sean Darby said in a research note on Wednesday.

On the home front, the number of Americans filing for weekly jobless claims fell to 192K, compared to a consensus figure of 205K. Meanwhile, housing starts and building permits surged in February.

The Philly Fed’s gauge of business outlook for March came in at -23.2 versus a consensus of -15.6.

Export prices in February unexpectedly rose, while import prices fell less than estimated.

Treasury yields had collapsed in the previous session, and were slightly down today as well. The 10-year Treasury yield (US10Y) was down 4 basis points to 3.45%, while the 2-year yield (US2Y) was lower by 5 basis points to 3.93%.

Among active stocks, Advanced Micro Devices (AMD) was now the top percentage gainer on the S&P 500 (SP500), continuing a recent hot streak. The stock is on track for a three-day winning streak.

Intel (INTC) was also among the top S&P percentage gainers. Investment firm Susquehanna upgraded the company, along with Qualcomm (QCOM) and Skyworks (SWKS), on the belief that the “bottom” of the chip downturn has past.

Adobe (ADBE) gained after reporting quarterly results that beat estimates.

Regional banks continued their decline. First Republic Bank (FRC), was the top S&P percentage loser after a report that the lender was evaluating a possible sale.

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