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Stock Market News for Mar 27, 2023

Wall Street closed higher on Friday to end a volatile trading week that saw the central bank increasing interest rates by another 25 basis points, while Fed officials calmed down fears of the liquidity crisis spilling over in the banking sector. All three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.4% or 132.28 points to end at 32,237.53 points.

The S&P 500 rose 0.6% or 22.27 points to finish at 3,970.99.64 points. Utilities, real estate and consumer staple stocks were the biggest gainers.

The Utilities Select Sector SPDR (XLU) and the Real Estate Select Sector SPDR (XLRE) gained 3.1% and 2.6%, respectively. The Consumer Staples Select Sector SPDR (XLP) rose 1.7%. Nine of the 11 sectors of the benchmark index ended in positive territory.

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The tech-heavy Nasdaq climbed 0.3% or 36.56 points to close at 11,823.96 points.

The fear-gauge CBOE Volatility Index (VIX) was down 3.85% to 21.74. Advancers outnumbered decliners on the NYSE by a 1.47-to-1 ratio. On Nasdaq, a 1.26-to-1 ratio favored advancing issues. A total of 11.08 billion shares were traded on Friday, lower than the last 20-session average of 12.84 billion.

Markets Stabilize after Volatility

A sell-off of European bank shares raised concerns over possible contagion beyond regional banks that threatened to spread to their larger peers. This saw markets open lower on Friday as a selloff in the U.S.-listed shares of Deutsche Bank Aktiengesellschaft (DB) put pressure on both investors’ sentiment and the three major indexes.

However, the bank pared some of the losses later on and closed 3.1% down after declining as much as 7%. Deutsche Bank has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Friday saw major movement in stocks in a week that saw the Fed increasing interest rates by another 25 basis points. Wall Street is already under pressure owing to the steep rate hikes that are being continued by the Fed in its fight to control soaring inflation. The pressure escalated further following the collapse of Silicon Valley Bank and Signature Bank earlier this month.

These have raised concerns over the health of the nation’s banking system. However, presidents from three regional Fed banks in separate appearances said on Friday that they were confident that the banking sector was not facing any liquidity crisis, which led to the decision to hike interest rates by 25 basis points.

Prior to that, on Thursday, Treasury Secretary Janet Yellen said that Fed officials were ready to take further necessary actions if required to stabilize U.S. banks. The comments from Yellen and other Fed officials buoyed confidence among investors.

Markets finally ended higher on Friday as stocks of regional banks rebounded. The positive sentiment also saw the three major indexes end the week in higher.

Economic Data

In economic data released on Friday, the U.S. Census Bureau announced that durable goods orders declined 1% in February or $2.6 billion to $268.4 billion. This follows a 5% decline in January.

Weekly Roundup

All three major indexes ended the week in positive territory. The Dow closed 1.2% higher for the week. The S&P 500 and Nasdaq edged up 1.45 and 1.7%, respectively, for the week.

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