NEW YORK, May 6 — US stocks rallied yesterday, with the Dow posting its biggest one-day percentage gain since January 6, as shares of Apple surged more than 4 per cent after upbeat results and US jobs data pointed to a resilient labour market.
Adding to the bullish momentum, regional bank shares reboundedfrom declines tied to the collapse of First Republic Bank. Analysts upgraded a number of lenders they said were oversold.
PacWest Bancorp rallied 81.7 per cent and Western Alliance Bancorp jumped 49.2 per cent, while the KBW regional bank index advanced 4.7 per cent.
Apple’s quarterly resultsalso cheered investors worried about a potential recession. The iPhone maker’s shares hit their highest level in about nine months, and the stock ended up 4.7 per cent in its biggest daily percentage gain since November.
The stock was the biggest positive influence on all three major US stock indexes.
The US Labour Department report showed job growth accelerated in April and wage gains increased solidly, suggesting the labour market has stayed strong despite recent interest rate hikes from the Federal Reserve.
With the jobs report, “it’s about the state of the US economy, and what we saw today suggests it’s in a better position than previously expected,” said Kristina Hooper, chief global market Strategist at Invesco in New York.
Investors have been worried that the rate hikes may eventually push the economy into recession.
The Dow Jones Industrial Average rose 546.64 points, or 1.65 per cent, to 33,674.38, the S&P 500 gained 75.03 points, or 1.85 per cent, to 4,136.25 and the Nasdaq Composite added 269.02 points, or 2.25 per cent, to 12,235.41.
The Cboe Volatility index registered its biggest one-day decline since March 16.
The Dow and S&P 500 still registered losses for the week, however, while the Nasdaq ended with a slight gain for the week.
On Wednesday, the US central bank raised rates by 25 basis points as expected, but Fed Chair Jerome Powell noted it was too early to say with certainty that the rate-hike cycle was over as inflation remains the chief concern.
Apple drove gains in other tech shares, but all 11 major S&P sectors were higher on the day.
The estimated decline in first-quarter S&P 500 earnings has been getting smaller since the start of the reporting season and is now at just 0.7 per cent year-over-year, Refinitiv data showed yesterday.
Volume on US exchanges was 10.57 billion shares, compared with the 10.70 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 4.95-to-1 ratio; on Nasdaq, a 2.75-to-1 ratio favoured advancers.
The S&P 500 posted 13 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 87 new highs and 104 new lows. — Reuters