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Shares of regional, major U.S. banks gain
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Meta up on Morgan Stanley rating upgrade
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Tesla jumps on retail sales data
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Indexes up: Dow 0.91%, S&P 1.00%, Nasdaq 0.93%
(Updates prices to open; adds details, comments)
By Ankika Biswas and Amruta Khandekar
March 21 (Reuters) - Wall Street's main indexes climbed
on Tuesday after the rescue of Credit Suisse calmed nerves about
a bigger banking crisis, while investors awaited the outcome of
the Federal Reserve's monetary policy meet.
Traders largely expect a 25-basis-point rate hike from the Fed on Wednesday, half the 50-bps increase expected before the banking crisis triggered by Silicon Valley Bank and Signature Bank's collapse. The state-backed takeover of Credit Suisse by UBS and steps taken by central banks to boost liquidity have eased contagion fears for the broader banking sector, but analysts believe the crisis hasn't been fully averted. "While it's a plus that banks so far have been rescued in the sense of deposits, I don't think we've seen the end of the turmoil," said Peter Cardillo, chief market economist at Spartan Capital Securities. "The last thing the Fed wants to do is to create havoc in the markets ... and the best thing that they could do is just take a pause and then revisit it in May."
The U.S. banking system is stabilizing after strong actions from regulators, but further steps to protect bank depositors may be warranted if smaller institutions suffer deposit runs that threaten more contagion, said U.S. Treasury Secretary Janet Yellen. Boosting the S&P 500 , major U.S. banks like JPMorgan Chase , Citigroup and Bank of America advanced around 3%.
Beaten-down regional lenders climbed, with First Republic Bank rebounding 25% after hitting a record low on Monday. JPMorgan CEO Jamie Dimon is leading talks with other big banks on fresh steps to stabilise First Republic with a possible investment into the lender, the Wall Street Journal reported on Monday. Peers PacWest Bancorp and Western Alliance Bancorp rose 11.8% and 11%, respectively.
Among major movers, Meta Platforms Inc jumped 1.8% after Morgan Stanley upgraded the stock to "overweight" from "equal weight", while Tesla Inc soared 3.7% on expectations of a strong quarter in China following the latest retail sales data. At 9:41 a.m. ET, the Dow Jones Industrial Average was up 292.28 points, or 0.91%, at 32,536.86, the S&P 500 was up 39.32 points, or 1.00%, at 3,990.89, and the Nasdaq Composite was up 108.64 points, or 0.93%, at 11,784.18. All the 11 S&P 500 sector indexes were in the green, with financials leading the advance. Nvidia Corp edged 0.7% higher ahead of the chipmaker's annual conference for software developers later in the day. PDD Holdings Inc slipped 1.8% after Alphabet Inc's Google suspended the Play version of the Chinese e-commerce platform's Pinduoduo app after malware issues. Advancing issues outnumbered decliners by a 6.22-to-1 ratio on the NYSE and a 4.31-to-1 ratio on the Nasdaq. The S&P index recorded five new 52-week highs and no new lows, while the Nasdaq recorded 19 new highs and 42 new lows.
(Reporting by Shubham Batra, Amruta Khandekar and Ankika
Biswas in Bengaluru; Editing by Nivedita Bhattacharjee and Vinay
Dwivedi)
