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JPMorgan rises on plans to buy most of First Republic
assets
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Fed expected to raise rates later this week
(Updates to close)
By Caroline Valetkevitch
NEW YORK, May 1 (Reuters) - U.S. stocks ended little
changed on Monday as investors took in the weekend auction of
First Republic Bank and braced for another expected
interest rate hike from the Federal Reserve this week.
The KBW regional banking index fell sharply, while
shares of JPMorgan Chase & Co , which won the auction of
First Republic, rose.
JPMorgan will pay the U.S. Federal Deposit Insurance Corp
$10.6 billion to take control of most of the regional bank's
assets.
Investors have been on edge about the banking system's
health following the collapse of two other regional banks in
March.
"Hopefully this is sort of the last of the banking crisis,
but something else might surface at some point," said Tim
Ghriskey, senior portfolio strategist at Ingalls & Snyder in New
York.
Market watchers also digested the latest economic news. The
Institute for Supply Management (ISM) said on Monday that its
manufacturing PMI rose last month from March.
The Fed, which has been raising rates to cool inflation, is
expected to hike rates an additional 25 basis points on
Wednesday.
According to preliminary data, the S&P 500 lost 2.15
points, or 0.05%, to end at 4,167.33 points, while the Nasdaq
Composite lost 14.83 points, or 0.12%, to 12,211.75. The
Dow Jones Industrial Average fell 50.42 points, or 0.15%,
to 34,047.74.
Energy stocks fell along with crude oil prices .
Recent earnings, however, are providing some optimism for
investors, Ghriskey said. First-quarter results from S&P 500
companies have mostly beaten expectations, easing economic
concerns.
"We've had good earnings relative to expectations. Analysts
for now have backed off of lowering estimates," he said. "If we
could have rates at this level ... and corporate America
continue to deliver, it's very positive."
Recent upbeat earnings from Alphabet Inc ,
Microsoft Corp and Meta Platforms Inc helped
the benchmark S&P 500 notch its second consecutive month of
gains on Friday.
(Additional reporting by Ankika Biswas and Sruthi Shankar in
Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta
and Richard Chang)
