US stocks rallied on Wednesday, with all three major indexes ending up at least 1 percent as upbeat outlooks from Micron Technology and other companies eased some worries about the health of the economy.
In a sign of potential further strength, the S&P 500 also closed above its 50-day moving average for the first time since March 6, before the onset of the bank crisis, and the CBoe volatility index, Wall Street's fear gauge, ended at its lowest level since March 8.
Micron shares shot up 7.2 percent, boosting the Nasdaq and S&P 500, and leading gains in the PHLX semiconductor index , which closed 3.3 percent higher.
The memory chip maker late on Tuesday forecast a drop in third-quarter revenue in line with Wall Street expectations, while it gave a rosy outlook for 2025 with artificial intelligence boosting sales.
Adding to the optimism, Lululemon Athletica jumped 12.7 percent after an upbeat annual results forecast.
"We had a couple of good reads into the economy from a couple of companies," said King Lip, chief investment strategist at BakerAvenue Wealth Management in San Francisco.
"Micron is sort of a microcosm of the global economy because their chips go into so many different industries and sectors. If they are optimistic about things in terms of orders, that means the overall economy is doing well."
The bulk of S&P 500 companies begin reporting on the first quarter in mid-April.
Investors are also trying to gauge whether turmoil in the banking system may be subsiding, and what that may mean for Federal Reserve policy.
The Dow Jones Industrial Average rose 1 percent, to 32,718, the S&P 500 gained 1.42 percent, to 4,028 and the Nasdaq Composite added 1.79 percent, to 11,926.
"People are feeling a little more comfortable with each day that passes since we had the failures," said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut. (Reuters)
Last updated: 2023-03-30 HKT 09:42