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European Central Bank raises key policy rate
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First Republic Bank shares reverse course and turn higher
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Meta, Snap climb as U.S. threatens TikTok ban
(Updates prices and comments)
By David Carnevali
NEW YORK, March 16 (Reuters) - A strong rebound by
financials helped Wall Street's main indexes close firmly
positive on Thursday, after media reports said some of the
country's largest lenders were in talks to aid First Republic
Bank.
The technology sector also contributed to the gains, helping to boost the Nasdaq Composite to its strongest performance since Feb. 2, 2022. The latest twist in the regional banks saga came on the heels of a 50 basis point rate hike by the European Central Bank, which earlier in the day had dampened investor sentiment already hurt by fears of a banking crisis. Financial institutions, including JP Morgan Chase & Co and Morgan Stanley , confirmed earlier reports they would deposit up to $30 billion into First Republic Bank's coffers to stabilize the lender, according to several reports, including Reuters sources. "Banks are looking out for one another," said Huntington Private Bank chief investment officer, John Augustine.
"We had two outliers go down and now they want to save what is considered a more mainstream bank." Shares of JP Morgan and Morgan Stanley advanced, while the possibility of a rescue buoyed First Republic Bank .
The positive sentiment spread to some of the other regional
lenders, with Alliance Bancorp posting strong gains.
The KBW regional banking index and the S&P 500
banking index both rebounded from negative territory to
close higher.
Concerns about banks have rattled the stock market in
recent days after the collapse of SVB Financial fueled contagion
fears.
Meanwhile, U.S. Treasury Secretary Janet Yellen said the U.S. banking system remains sound and Americans can feel confident that their deposits will be there when needed.
U.S.-listed shares of Credit Suisse advanced after
the bank secured a credit line of up to $54 billion from the
Swiss National Bank to shore up liquidity and investor
confidence.
According to preliminary data, the S&P 500 gained 68.67 points, or 1.76%, to end at 3,960.60 points,
while the Nasdaq Composite gained 283.85 points, or
2.48%, to 11,717.90. The Dow Jones Industrial Average rose 377.34 points, or 1.18%, to 32,251.91.
Data showed the number of Americans filing new claims
for unemployment benefits fell more than expected last week,
pointing to continued labor market strength, which could
persuade the Fed to keep raising rates further.
Weak retail sales figures, as well as data showing a
downward trend in producer inflation, on Wednesday had bolstered
bets of a small rate hike by the Federal Reserve at its meet
concluding on March 22.
Money markets are still largely pricing in a 25-basis-point
rate hike by the Fed at its March 22 policy announcement. .
Facebook parent Meta Platforms and Snapchat
operator Snap Inc climbed after the U.S. administration
threatened to impose a ban on rival TikTok.
(Reporting by David Carnevali)
