US stocks rise as investors cheer strong corporate earnings and shake off banking fears

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, New York, U.S., March 10, 2020.

Andrew Kelly/Reuters

• US stocks rose on Friday, boosted by a streak of strong earnings reports.
• 79% of S&P 500 companies that reported earnings have beated estimates, according to FactSet. 
• Investors digested fresh bank weakness amid reports that First Republic is headed for FDIC receivership. 

US stocks gained on Friday with the Dow Jones Industrial Average wrapping up its best month since January as first quarter earnings surprise to the upside, helping investors sidestep fresh concerns about the banking sector. 

All three major indexes ended the day in the green, with the Dow locking in a gain of 2.5% for the month of April. 

So far, more than half of all companies in the S&P 500 have reported their financials for the first quarter, with 79% of companies that have reported earnings beating estimates, according to data from FactSet.

Investors were hit with a new bout of banking sector worries Friday as reports said that First Republic Bank is likely headed for a takeover by the Federal Deposit Insurance Corporation. First Republic shares tanked as much as 52% during the session. 

Here's where US indexes stood at the 4:00 p.m. ET close on Friday:

• S&P 500: 4,169.58, up 0.83%
• Dow Jones Industrial Average: 34,098.95, up 0.81% (272.79 points)
• Nasdaq Composite: 12,226.58, up 0.69%

Data on Friday also showed the Personal Consumption Expenditures index, the Fed's preferred measure of inflation, rose just 0.1% over the past month. Meanwhile, the Employment Cost Index rose 1.2% over the past quarter, a sign that inflation's presence is still being felt in the economy.

"The case for another Fed rate hike next week has been solidified by today's Employment Cost Index and Personal Consumption Expenditure reports showing ongoing cost pressures," Lazard's chief market strategist Ron Temple said in a note. "Taken alongside the solid domestic demand in yesterday's GDP report, it's clear that the US economy remains resilient in the face of tightening to date, implying that the Fed's job is not yet complete."

Investors are now pricing in an 88% chance that the Fed will hike interest rates another 25 basis-points at next week's meeting of the Federal Open Market Committee, according to the CME FedWatch tool.

Here's what else is happening:

• This highly-watched recession indicator says that an economic downturn will begin this quarter, Bank of America said.
• "Dr. Doom" economist Nouriel Roubini warned that a hard landing recession or entrenched inflation are the only possible outcomes for the US economy.
• "Shark Tank" investor Kevin O'Leary blew off concerns of de-dollarization, adding that he wouldn't accept the Chinese yuan in business transactions.
• Tight housing inventory is preventing home prices from falling further, Redfin said.
• Russia's economy has little to offer China, and their growing trade ties are more modest than it appears, according to one analyst.
• There are four issues that will determine the path of the global economy, top economist Mohamed El-Erian said.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil rose 2.59% to $76.69 per barrel. Brent crude, oil's international benchmark, climbed 1.4% to $79.51 a barrel.
• Gold ticked down to $1,998.40 per ounce.
• The 10-year Treasury yield fell eight basis points to 3.43%.
• Bitcoin fell  about 1% to $29,363. 

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