Stock market today: Dow closes higher as tech reigns supreme on Micron rally

March 29, 2023 4:14 PM EDT

By Yasin Ebrahim -- The Dow closed higher Wednesday, driven by a Micron-fueled surge in tech and further signs of easing worries in the banking sector.

The Dow Jones Industrial Average added 1%, or 323 points, the S&P 500 rose 1.4%, and the Nasdaq gained 1.8% ending the day at its highest level since August.

Micron Technology Inc (NASDAQ: MU) jumped more than 7%, pushing chip stocks and the broader tech market higher after the chipmaker’s better-than-expected revenue guidance and positive commentary on a bottom in chip demand offset quarterly results that fell short of estimates.

“Micron's commentary around improving customer inventory levels and the company's forecast for bit shipment growth into FQ3 (and moving forward) suggests that industry fundamentals are closer to bottoming,” Wedbush said in a note.

Other chip stocks also caught a bid, with Intel Corporation (NASDAQ: INTC), Lam Research Corp (NASDAQ: LRCX) and Marvell Technology (NASDAQ: MRVL) sharply higher.

Broadcom (NASDAQ: AVGO), however, notably lagged the move after the UK launched a further probe into the chipmaker’s merger with VMware (NYSE: VMW), citing antitrust concerns.

Consumer stocks were also among the top gainers on the day, driven by a rally in Carnival (NYSE: CCL) after Susquehanna upgraded the cruise line to Positive from Neutral on expectations that ongoing volume and pricing momentum will boost margins.

Retail stocks struggled to participate in the broader market melt-up after the UBS downgraded a slew of retailers on worries of the impact of a consumer slowdown.

UBS downgraded Ross Stores (NASDAQ: ROST), Burlington Stores (NYSE: BURL), Urban Outfitters (NASDAQ: URBN), and Foot Locker (NYSE: FL) to Sell from Neutral.

“Our view has been a consumer spending slowdown will cause the industry’s earnings outlook to deteriorate throughout the year, leading to persistent downward EPS revisions,” it added.

Bank stocks were also in the ascendency as concerns about a contagion continue to ease, with regional banks including First Republic Bank (NYSE: FRC), Lincoln National Corporation (NYSE: LNC) and Zions Bancorporation (NASDAQ: ZION) leading to the upside.

Energy stocks, meanwhile, rose more than 1%, as strong sentiment on the sector overshadowed weaker oil prices.

The slip in oil prices comes even as data showed U.S. weekly crude inventories unexpectedly fell last week.

Devon Energy Corporation (NYSE: DVN), EQT Corporation (NYSE: EQT), and EOG Resources Inc (NYSE: EOG) rose about 2% on the day.

In other earnings news, Lululemon Athletica Inc (NASDAQ: LULU) jumped more than 12% after the athleisure wear company reported quarterly results that topped Wall Street estimates, driven by strong demand and a reduction in inventories.

The quarterly results marked “a clear indication of a brand that continues to resonate well with an expanding base of core consumers,” Oppenheimer said, and a management team and business model that are "navigating well a choppy, uncertain consumer backdrop.”

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