US stocks rallied on Friday, with the Dow posting its biggest one-day percentage gain since Jan. 6, as shares of Apple surged more than 4 percent after upbeat results and US jobs data pointed to a resilient labor market.
Adding to the bullish momentum, regional bank shares rebounded from declines tied to the collapse of First Republic Bank.
Analysts upgraded a number of lenders they said were oversold.
PacWest Bancorp rallied 81.7 percent and Western Alliance Bancorp jumped 49.2 percent, while the KBW regional bank index advanced 4.7 percent.
Apple’s quarterly results also cheered investors worried about a potential recession.
The iPhone maker’s shares reached their highest level in about nine months, and the stock closed 4.7 percent higher in its biggest daily percentage gain since November last year.
Photo: Reuters
The stock was the biggest positive influence on all three major US stock indices.
A US Department of Labor report showed job growth accelerated last month and wage gains increased solidly, suggesting that the labor market has remained strong despite recent interest rate hikes by the US 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 could eventually push the economy into recession.
The Dow Jones Industrial Average rose 546.64 points, or 1.65 percent, to 33,674.38, the S&P 500 gained 75.03 points, or 1.85 percent, to 4,136.25 and the NASDAQ Composite added 269.01 points, or 2.25 percent, to 12,235.41.
The Cboe Volatility index registered its biggest one-day decline since March 16.
However, the Dow and S&P 500 still registered losses for the week of 1.24 percent and 0.8 percent respectively, but the NASDAQ ended with a slight gain of 0.07 percent.
On Wednesday, the US central bank raised rates by 25 basis points as expected, but Fed Chairman Jerome Powell said that 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 percent year-over-year, Refinitiv data showed on Friday.
Volume on US exchanges was 10.57 billion shares, compared with the 10.70 billion average for the full session over the past 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 4.95-to-1 ratio; on the NASDAQ, a 2.75-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and three new lows, while the NASDAQ Composite recorded 87 new highs and 104 new lows.
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