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Virgin Orbit soars on nearing $200 mln deal
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GameStop jumps after surprise Q4 profit
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First Republic Bank shares fall
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Indexes down: Dow 0.10%, S&P 0.11%, Nasdaq 0.15%
(Updates to market open)
By Amruta Khandekar and Shubham Batra
March 22 (Reuters) - Wall Street's main indexes edged
lower on Wednesday, ahead of the outcome of the Federal
Reserve's rate-setting meeting in which the central bank will
seek to balance inflation and banking sector concerns.
Traders have halved the size of the expected interest rate
hike to 25 basis points following troubles in the banking
sector, with some pointing to the Fed's aggressive monetary
tightening over the past year as one of the reasons for the
crisis.
Analysts have said a pause was unlikely as it would indicate
the banking turmoil, sparked by the failure of two U.S. regional
lenders, had rattled the central bank.
The U.S. central bank's two-day policy meeting will end at 2
p.m. ET (1800 GMT), with investors keenly awaiting Fed Chair
Jerome Powell's conference at 2:30 p.m. ET to gauge the central
bank’s rate-hike trajectory.
"In order to solve the banking problem, you really have to
go back down to very low interest rates and I don't think that's
going to happen," said Paul Nolte, senior wealth adviser and
market strategist at Murphy & Sylvest.
"What you're going to wind up with is a Fed that will
probably be a little bit more focused on inflation and they're
going to deal with the banking situation as it comes up."
Eight of the S&P's 11 major sectors were in the red, with
rate-sensitive real estate stocks falling 1.9% to
their lowest level since Nov. 4.
Apple Inc and Nvidia Corp , up 0.4% and
2.4% respectively, helped limit losses for the broader markets.
Wall Street's main indexes notched gains in the past two straight sessions, after the rescue of Credit Suisse as well as measures by central banks to boost liquidity helped soothe some worries about risks to other banks. However, a scramble by troubled regional U.S. lender First Republic Bank to secure a capital infusion has kept alive some worries about the banking sector. Shares of First Republic slid 4.4%, with a Bloomberg News report on Tuesday stating the bank's rescue could rely on backing from the U.S. government to facilitate a deal. Shares of its peer PacWest Bancorp were down 7.9%, while Western Alliance Bancorp was marginally up 0.1%.
U.S. Treasury yields rose, with the yield on the two-year note, which best reflects interest rate expectations, last at 4.212%. At 9:42 a.m. ET, the Dow Jones Industrial Average was down 31.96 points, or 0.10%, at 32,528.64, the S&P 500 was down 4.51 points, or 0.11%, at 3,998.36, and the Nasdaq Composite was down 17.73 points, or 0.15%, at 11,842.38. Among other stocks, Virgin Orbit Holdings Inc soared 42.3% after Reuters reported the company is near a deal for a $200 million investment from Texas-based venture capital investor Matthew Brown.
GameStop Corp jumped 32.1% after the company posted a surprise profit for the fourth quarter, helped by lower costs and job cuts. Carvana Co rose 17.8% after the used-car retailer forecast smaller core loss in the current quarter due to a raft of cost-cut measures.
Declining issues outnumbered advancers by a 1.56-to-1 ratio on the NYSE a 1.75-to-1 ratio on the Nasdaq. The S&P index recorded no new 52-week high and four new lows, while the Nasdaq recorded 13 new highs and 34 new lows.
(Reporting by Amruta Khandekar and Shubham Batra in Bengaluru;
Editing by Nivedita Bhattacharjee and Vinay Dwivedi)
