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NEW YORK (Reuters) – Wall Street’s major indexes held firm on Thursday after a strong rebound in the financial sector. After some of the country’s biggest lenders bailed out the beleaguered First Republic Bank.
The technology sector (.SPLRCT) also contributed to the gains, pushing the Nasdaq Composite to its best performance since 2-Feb-2022.
The latest twist in the US regional bank narrative follows a 50 basis point rate hike by the European Central Bank.
Financial institutions such as JPMorgan Chase (JPM.N) and Morgan Stanley (MS.N) have pledged up to $30 billion to First Republic Bank to stabilize its lender. I confirmed a previous report that it would be deposited.
“Banks look out for each other,” said John Augustin, chief investment officer at Huntington Private Bank.
“We have pulled back two outliers, but now want to save the ones that are considered more mainstream banks.”
Shares of JP Morgan and Morgan Stanley rose 1.94% and 1.89% respectively, while Lifeline, which supported First Republic Bank (FRC.N), rose 9.98%.
Alliance Bancorp (WAL.N) and Pakwest Bancorp (PACW.O) rose 14.09% and 0.7% respectively from negative starts.
The KBW Regional Banking Index (.KRX) was up 3.26% and the S&P 500 Banking Index (.SPXBK) was up 2.16%, with both sub-indices reversing their losses.
Concerns about banks have rocked stock markets in recent days after the SVB Financial collapse fueled fears of contagion.
Meanwhile, Treasury Secretary Janet Yellen said the U.S. banking system remains healthy and Americans can be confident they will have money when they need it.
US-listed shares of Credit Suisse rose after the bank secured a line of credit of up to $54 billion from the Swiss National Bank to boost liquidity and investor confidence.
The Dow Jones Industrial Average (.DJI) rose 371.98 points (1.17%) to 32,246.55, the S&P 500 (.SPX) rose 68.35 points (1.76%) to 3,960.28, and the Nasdaq Composite (.IXIC) rose to 283.23. points increased. 2.48% to 11,717.28.
Data show a better-than-expected decline in the number of Americans filing new applications for unemployment benefits last week, indicating continued strength in the labor market, prompting the Fed to continue raising rates further You may be persuaded to do so.
Weak retail sales on Wednesday and data pointing to a downtrend in producer inflation boosted bets that the Federal Reserve will raise rates modestly at its meeting ending March 22nd.
Financial markets are still largely pricing in a 25 basis point rate hike by the Fed in its March 22 policy announcement. .
Facebook parent Meta Platforms (META.O) and Snapchat operator Snap (SNAP.N) rose 3.63% and 7.25% after the U.S. government threatened to ban rival TikTok. .
On the New York Stock Exchange, gainers outnumber losers by a ratio of 2.80 to 1. On the Nasdaq, gainers dominated with a ratio of 1.95 to 1.
The S&P 500 posted four new 52-week highs and 22 new lows. The Nasdaq Composite posted 38 new highs and 235 new lows.
Reported by David Carnevali
Our standards: Thomson Reuters Trust Principles.
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