The stock market indexes all gains and closed close to today’s highs on Friday. US major bank shares fell as follows the German bank‘s (DB) sell-off caused by a steep rise in the cost of credit default swaps, an insurance policy to cover defaults on debt.
The 10-year US Treasury yield fell 4 basis points to 3.38%.
The Dow Jones Industrial Average improved towards the end, eventually turning around with a gain of 0.4%. The Nasdaq rose 0.3% and was also off session lows. The S&P 500 rose 0.6 percent. The Russell 2000 gained 0.9%.
The Dow rose 1.1% and the S&P 500 gained 1.4% for the week. The Nasdaq showed dominance and had a weekly increase of 1.7%.
NYSE and Nasdaq volume fell from Thursday, according to preliminary figures.
The S&P 500 bounced back above its 200-day moving average. The Nasdaq remained above its 50- and 200-day moving averages. Nasdaq 100-tracker Invesco QQQ Trust ETF ( QQQ ) rose 0.4%.
The Innovator IBD 50 ETF (FFTY) underperformed the major indexes, falling 1.2%.
Crude retreated 1.1% to $69.22 a barrel. Bitcoin fell 2.4% to $27,860.
European shares fell as fears of contagion hit one of the continent’s biggest banks. Germany’s DAX lost 1.7% as the Deutsche Bank news rocked the index. The Paris CAC fell 1.7% in sympathy with the DAX. The London FTSE closed 1.3% lower.
Economic data show that new orders are declining
The February durable goods report said orders fell 1% against an expected 1.5% increase. The number of exclusive transport orders was unchanged compared to the forecast 0.3% increase. Core capital goods rose 0.2 percent.
March’s flash S&P Global Purchasing Managers’ Index (PMI) composite manufacturing index reached 53.3, representing a 10-month high. The manufacturing production index reached 51.0, also a 10-month high.
The manufacturing PMI rose to 49.3 against the 47.2 consensus forecast. The reading has been below 50 for the past four months, which signals falling production in the private sector.
The service index increased to 53.8 vs. 50.3 forecast, the second reading in a row above 50. New orders at service providers posted their first gain since September.
The stock market today: Banks under pressure
Deutsche Bank gaped at news of a sharp increase in its credit default swaps. The German bank is the latest to come under the cloud of contagion fears. US-traded stocks pared losses and were down 3.1% in late trade.
JPMorgan Chase (JPM) retreated 1.5% and Bank of America (BAC) erased earlier losses, rising 0.6%. Other major banks fell in sympathy with Deutsche Bank.
The Financial Select Sector SPDR ETF (XLF) closed relatively unchanged. The SPDR S&P Regional Bank ETF (KRE) gained 3% as regional banks saw signs of life.
Market Rally still hasn’t done this; What to do now
Other stock market action: Tommy Bahama stock falls
IBD 50 stock Vertex Pharmaceuticals (VRTX) gained 3.2% and is working its way up to the 325.29 buy point for a flat base. Bernstein initiated coverage of the biotech on Tuesday with an outperform rating and 344 price target. The company specializes in treatments for cystic fibrosis.
Packaged food processor Mondelez (MDLZ) rose 2.7% to hit a buy point at 68.91 for a flat base, but volume was light. The relative strength line has been on a steep uptrend since early February, but is missing new highs.
Clothing retailer Oxford Industries (OXM) was down 12.7% in heavy volume. The company reported better-than-expected earnings and sales in the 4th quarter, but gave disappointing earnings guidance for the 1st quarter.
The stock fell below its 50-day line, a likely sell signal. The company owns brands including Tommy Bahama and Lilly Pulitzer.
Regeneron Pharmaceuticals (REGN) rose a further 2.2% in heavy volume after yesterday’s 6.8% gap-up. It remains in a buy zone from a buy point of 800.58.
The drug warehouse appeared on Thursday’s news about a successful late-stage study on the treatment of “smoker’s lung”, co-developed with Sanofi (SNY). The Sanofi share rose 1.7 percent on Friday.
Intuitive surgical ( ISRG ) rose 4.9% after William Blair initiated coverage on the medical stock with an outperform rating. The stock is an S&P 500 big gainer today. The company manufactures the da Vinci robotic surgical system.
IBD 50 stock Monolithic power systems (MPWR) plunged 4.9%, sending it below the 21-day mark. But shares remain above their 50-day moving average. The layer has been notched as it forms the handle on a cup-with-handle base.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
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