U.S. stocks recovered after an early setback on Monday, but still ended on a mixed note, although shares from the technology space outperformed, spending much of the day’s session in positive territory.
Concerns over the fallout of the collapse of Silicon Valley Bank rendered the mood quite bearish at the start.
The assurance from the U.S. Treasury, Federal Reserve, and Federal Deposit Insurance Corporation that they would “fully protect” depositors, including those with assets above the federally guaranteed $250,000 limit, helped lift sentiment.
Hopes that the Fed will pause its tightening cycle due to the debacle in the banking sector contributed as well to the market’s recovery.
Among the major averages, the Dow, which plunged to 31,624.87 in early trades, ended with a loss of 90.50 points or 0.28 percent at 31,819.14. The S&P 500 ended 5.83 points or 0.15% lower at 3,855.76, recovering from 3,808.86.
The Nasdaq ended higher by 49.96 points or 0.45 percent at 11,188.84, more than 200 points off the day’s low of 10,982.80.
Several stocks from the banking sector posted big losses. First Republic Bank tanked more than 60 percent, Keycorp, Zions Bancorporation, First Horizon National and KeyCorp, all shed more than 20 percent.
American Express ended nearly 5 percent down. Goldman Sachs closed lower by more than 3 percent, and JP Morgan Chase drifted down 1.7 percent.
Travelers Companies, Merck, Caterpillar, Walt Disney, Chevron, Visa and Intel also ended weak, albeit with less pronounced losses.
Amgen, Microsoft, Apple, Salesforce.com, Coca-Cola, Walgreens Boots Alliance, Johnson & Johnson and IBM ended with sharp to moderate gains.
The focus is on Tuesday’s U.S. inflation data. The Federal Reserve’s policy meeting is scheduled to be held on March 21-11, while the Bank of England meets a day after the FOMC meeting on March 23.
Goldman Sachs analysts said they no longer expect the Federal Reserve to raise rates by 25 basis points at its next policy meeting on March 21-22.
In overseas trading, Asian stocks ended mixed on Monday as regulators from across the world moved to assuage investor concerns of a global ripple effect coming from the United States.
In a statement released Sunday, the Treasury, Federal Reserve and the FDIC said they would “fully protect” depositors with funds in the Silicon Valley Bank.
In addition, Signature Bank, a New York bank, was also closed by regulators over the weekend.
European stocks plunged sharply on Monday as rising concerns over the fallout from the Silicon Valley Bank collapse triggered heavy selling, particularly in the banking sector.
Investors also awaited the ECB meeting and key inflation data due this week.
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