US stocks rose on Thursday as technology-related shares extended their recent strong run, while regional US bank shares fell as the Biden administration proposed stronger measures to help reduce risk.
The S&P 500 technology index was up 1.1 percent and gave the S&P 500 its biggest boost, while the Philadelphia semiconductor index hit its highest level in nearly a year. Wednesday's strong gains grew on optimism that a downturn in chip sales has ended.
US regional bank shares fell as the Biden administration called for stricter rules that would strengthen mid-sized banks without having to go to Congress.
The KBW regional bank index ended down 2 percent, and the S&P 500 financial index fell 0.3 percent, the only S&P 500 sector in negative territory on the day.
"Tech is probably the furthest sector removed from financials," so there has been a rotation away from financials, said Jack Ablin, chief investment officer at Cresset Capital in Chicago.
The banking turmoil, which started earlier this month with the collapse of two regional US lenders, had sparked concerns about a broader financial crisis.
With one day to go in the first quarter, the technology sector was up about 20 percent for the period, leading sector gains along with communication services, which is up about 18 percent. Nasdaq is on track for its biggest percentage quarterly gain since the end of 2020.
Investors also awaited the February reading of personal consumption expenditures (PCE) price index due Friday after January figures showed a sharp acceleration in consumer spending.
Three Federal Reserve officials kept the door open on Thursday to more rate rises aimed at lowering inflation, with two noting banking sector problems could generate enough headwinds on the economy.
The Dow Jones Industrial Average rose 0.43 percent, to 32,859, the S&P 500 gained 0.57 percent, to 4,051 and the Nasdaq Composite added 0.73 percent, to 12,013.
Data earlier on Thursday showed jobless claims last week rose more than expected from the week before, indicating a cooling labour market.
Separately, fourth-quarter GDP growth was slightly lower at 2.6 percent compared with earlier estimates of 2.7 percent, both supporting the case for a softer Fed policy.
In another report, the Commerce Department confirmed the economy grew at a solid clip in the fourth quarter, but much of the increase in output came from inventory accumulation.
US-listed shares of Alibaba Group climbed 3.5 percent on a report that its logistics arm had started preparations with banks for its Hong Kong initial public offering, while those of JD.com jumped 7.8 percent on plans to spin off its real estate infrastructure arm. (Reuters)
Last updated: 2023-03-31 HKT 08:31