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First Republic Bank tumbles on suspending dividend
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FedEx jumps on full-year profit forecast raise
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Futures mixed: Dow down 0.30%, S&P down 0.11%, Nasdaq up 0.10%
(Updates prices, adds comment)
By Shubham Batra and Amruta Khandekar
March 17 (Reuters) - U.S. stock index futures were mixed
on Friday as investors remained wary about a potential banking
crisis despite the country's largest banks throwing troubled
regional lender First Republic Bank a lifeline.
Big banks including JPMorgan Chase & Co and Morgan
Stanley threw a $30 billion lifeline to First Republic on Thursday, calming some nerves and helping Wall
Street's main indexes notch gains, with the tech-heavy Nasdaq rallying over 2%.
At 7:05 a.m. ET, Dow e-minis were down 96 points,
or 0.3%, S&P 500 e-minis were down 4.25 points, or
0.11%, and Nasdaq 100 e-minis were up 12.5 points, or
0.1%.
However, First Republic's shares fell 12.1% in premarket
trading after the bank suspended its dividend payout.
The lender's shares have taken a beating this week, slumping
58%, after the recent collapse of SVB Financial and
Signature Bank unleashed fears of a broader banking
crisis stemming from surging interest rates.
Peer PacWest Bancorp fell 5.2% before the bell,
while Western Alliance edged 1.7% lower. Big U.S. banks
were mixed, with JPMorgan and Citigroup flat, while Wells
Fargo edged 0.1% higher.
"We're not out of the woods yet by any means. The rally we
saw in equities yesterday was more of a relief rather than any
suggestion that we've turned a corner in any material sense,"
said Stuart Cole, head macro economist at Equiti Capital.
The news of the rescue came on the heels of a 50-basis-point
rate hike by the European Central Bank (ECB), which remains
laser-focussed on taming inflation despite concerns about the
region's banks after troubles emerged at Credit Suisse .
European Central Bank supervisors saw no contagion to euro
zone banks from the recent market turmoil, a source said.
Investors are now looking ahead to the Federal Reserve's
interest rate decision, due next week, to gauge how it will tame
inflation amid a banking crisis.
Despite a roller-coaster week, the Nasdaq appears
set to log its biggest weekly percentage gain since November
depending on the day's moves as a drop in U.S. Treasury yields
supported some Big Tech and growth stocks.
Treasury yields fell on Friday, with the yield on the
two-year note, which best reflects rate expectations, at 4.12%.
Money market participants now see an 83% chance of the Fed
raising rates by 25 basis points on March 22. "But thereafter, the market is kind of getting more bullish
now that could be the end, or at least a pause, in the Fed's
tightening," Cole said.
Investors will monitor on February industrial production
data and the University of Michigan's consumer sentiment survey
for March to assess the strength of the U.S. economy.
Shares of FedEx Corp rose 11.6% premarket after the
delivery giant raised its full-year earnings forecast, helped by
cost cuts.
(Reporting by Shubham Batra and Amruta Khandekar in Bengaluru;
Editing by Saumyadeb Chakrabarty and Savio D'Souza)
