*
Major banks fall, regional bank stocks rebound
*
Durable goods orders fall in February
*
Business activity gains steam in March
*
Indexes down: Dow 0.33%, S&P 0.40%, Nasdaq 0.70%
(Updates prices throughout; updates details, comments)
By Amruta Khandekar and Ankika Biswas
March 24 (Reuters) - Wall Street's main indexes fell on
Friday as investors fled from risky assets on growing concerns
that a contagion in the banking sector had not been fully
confined despite assurances from key officials.
Treasury Secretary Janet Yellen said late on Thursday
afternoon that measures will be taken to keep Americans'
deposits safe, which did little to ease jitters about a
liquidity crisis in the banking sector.
The selloff in the global banking sector first started in
Europe, where Deutsche Bank's credit default swaps rose to a
four-year high, sending its U.S-listed shares down 5.2%,
while a report on a U.S. probe into Credit Suisse and UBS further soured sentiment.
This has added to concerns that even larger banks may not be
able to escape a banking turmoil that was previously seen as
having a greater impact on regional lenders.
Shares of major U.S. banks such as JPMorgan Chase & Co , Wells Fargo and Bank of America dropped
between 0.8% and 2.4%.
"Deutsche Bank's connection is much more with large banks.
If there's any interconnected interbank concerns, there could be
a negative halo effect around the largest of the U.S. banks,"
said Art Hogan, chief market strategist at Riley Wealth.
Meanwhile, some regional lenders such as PacWest Bancorp , Western Alliance Bancorp and Truist Financial
Corp gained between 0.2% and 3.0%, faring better than
the larger banks.
The KBW regional banking index erased its losses and
gained 1.5%, having hit a fresh low since late 2020 earlier in
the day.
"The fact that we're getting a little bit of a bounce in the
oversold regionals makes sense because we're probably closer to
the end of this mini-bank drama than we are to the beginning of
it," Hogan added.
U.S. two-year Treasury yields fell sharply to their lowest
levels since September on Friday.
Traders' bets have now shifted toward a pause in U.S. rate
hikes in May, after the Federal Reserve signaled caution about
its next move amid the global banking crisis, sparked by the
failure of two regional banks.
Atlanta Fed President Raphael Bostic and St. Louis Fed
President James Bullard said getting inflation lower was the
central bank's priority despite the banking sector stress.
Data showed orders for durable goods fell 1% last month
against expectations of a 0.6% rise, while a S&P Global survey
showed business activity gained steam in March.
At 12:21 p.m. ET, the Dow Jones Industrial Average was down 106.41 points, or 0.33%, at 31,998.84, the S&P 500 was down 15.63 points, or 0.40%, at 3,933.09, and the
Nasdaq Composite was down 81.95 points, or 0.70%, at
11,705.45.
Defensive sectors such as utilities and consumer
staples were trading higher.
"Call of Duty" maker Activision Blizzard Inc jumped
5.1% after the UK competition regulator dropped some competition
concerns in the Microsoft-Activision deal.
Declining issues outnumbered advancers for a 1.31-to-1 ratio
on the NYSE and a 1.38-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 35 new
lows, while the Nasdaq recorded 18 new highs and 267 new lows.
(Reporting by Amruta Khandekar and Ankika Biswas; Editing by
Sriraj Kalluvila, Anil D'Silva, Vinay Dwivedi and Shounak
Dasgupta)
