Dow attempts to build on 3-day rally as stocks push higher in choppy trade

How are stock-index futures trading?

• The Dow Jones Industrial Average
  DJIA
  rose 160 points, or 0.5%, to 34,222, attempting to extend a winning streak to four sessions.

• The S&P 500
  SPX
  was up 21 points, or 0.5%, to 4,379 after back-to-back gains.

• The Nasdaq Composite
  COMP
  was up 39 points, or 0.3%, at 13,475, also looking for its third straight daily advance.

Stocks rallied sharply Wednesday following the Fed decision, with the Dow finishing more than 500 points, or 1.6%, higher, while the S&P 500 advanced 2.2%. The Nasdaq Composite Index jumped 3.8%, for its best one-day percentage rise since Nov. 4, 2020.

What’s driving the markets?

Stocks were steady Thursday after volatile trading Wednesday that resulted in a second day of gains.

The Federal Reserve on Wednesday afternoon delivered an as-expected quarter-percentage point interest-rate rise and laid out a path for several more increases to come this year. Fed Chairman Jerome Powell also said the U.S. economy was strong enough to cope with higher oil prices, but vowed not to let inflation get entrenched into the economy.

For stocks, the Fed decision effectively means “more of the same,” wrote Tom Essaye, founder of Sevens Report Research, in a note.

“Tactically long sectors with positive exposure to high inflation and high yields (commodities via DBC
DBC,
financials via XLF
XLF,
banks via KRE
KRE
/KBE
KBE,
financial services via IYG
IYG
). Conversely, avoiding sectors with high multiples and high P/Es is still a valid strategy, although we expect to begin to see bifurcation in tech as the low-P/E, well-capitalized tech begins to act as a safe haven as investors begin to more aggressively price in slowing growth in the coming months,” he wrote.

From a technical perspective, the market is “in a weak trend with little momentum and not a deep oversold condition,” said Jeff deGraaf, chairman of Renaissance Macro Research, in a note.

“We see this as an expectations game where positioning was slightly offsides, and the removal of an important unknown (Fed) got people to jump,” he wrote, warning that the 4,550 level for the S&P 500 “will be difficult to get through.”

Oil prices were on the rise again Thursday, after three days of losses that have helped underpin equity markets. West Texas Intermediate crude
CL00

CL

CLJ22
jumped 7.5% to $102.15 a barrel.

And while hopes for negotiations over the war in Ukraine have been helping to drive recent gains for equities, the violence continued with Russia accused bombing of a drama theater in Mariupol on Wednesday that had been used as a shelter.

U.S. congressional leaders are preparing range of economic sanctions that would strip Russia and its ally Belarus of permanent normalized trade status and could even take aim at China, given U.S. warnings against that country of supporting Moscow.

Read: Biden touts new aid to Ukraine, labels Putin ‘war criminal,’ after Zelensky asks U.S. to ‘do more’ in speech to Congress

Stocks had also risen on Wednesday after the Chinese government said it would support its stock market and economy. The Bank of England, meanwhile, on Thursday raised its benchmark interest rates again.

On the U.S. economic calendar Thursday, first-time claims for unemployment benefits fell by 15,000 in the week ended March 12 to 214,000. U.S. housing starts rose 6.8% in February to an annual rate of 1.77 milion, while the Philadelphia Fed’s regional factory index rose to 27.4 in March from 16 a month earlier. U.S. industrial production rose 0.5% in February.

Which companies are in focus?

• Shares of Dollar General Corp.
  DG
  rose 2.7% after providing an upbeat outlook for the coming fiscal year.

• Signet Jewelers Ltd.
  SIG
  reported fourth-quarter sales that beat expectations and raised its dividend. Shares were up 3.7%.

• Shares of Warby Parker Inc.
  WRBY
  sank 2.2% after the eyewear retailer reported a wider-than-expected fourth-quarter loss.

• Warren Buffett’s Berkshire Hathaway Inc.
  BRK

  MX:BRKB
  boosted its common stock ownership position in Occidental Petroleum Corp.
  OXY
  to 136.37 million shares or 14.6% of the oil-and-gas company, according to a filing on Wednesday. Occidental shares rose 8%, while Berkshire class A shares were up 2% after finishing Wednesday above $500,000 for the first time.

What are other assets doing?

• The yield on the 10-year Treasury note
  BX:TMUBMUSD10Y
  fell 2.1 basis points to 2.163%. Yields and debt prices move opposite each other.

• The ICE U.S. Dollar Index
  DXY,
  a measure of the currency against a basket of six major rivals, dropped 0.8%.

• Gold futures
  GC00
  rose 1.8% to trade near $1.945 an ounce.

• Bitcoin
  BTCUSD
  was down 0.8% to trade below $41,000.

• The Stoxx Europe 600
  XX:SXXP
  rose 0.5%, while London’s FTSE 100
  UK:UKX
  gained 1.3%.

• Hong Kong’s Hang Seng Index
  HK:HSI
  jumped 7%, while the Shanghai Composite
  CN:SHCOMP
  rose 1.4% and Japan’s Nikkei 225
  JP:NIK
  advanced 3.5%.