FRC - Dow S&P 500 rise on banking rebound; Nasdaq slips

2023-03-27 16:06:47 ET

Stocks finished Monday with a mixed performance. The further easing of concerns about the banking sector gave a lift to the Dow and S&P 500. However, mild weakness in tech weighed on the Nasdaq, which finished with a mild decline.

The Nasdaq Composite ( COMP.IND ) closed -0.5%, the S&P 500 ( SP500 ) finished +0.2% and the Dow ( DJI ) ended +0.6% .

Financial stocks got a boost from signs that regulators and industry players were taking further steps to shore up the banking sector following the string of bank failures earlier this month.

First Citizens ( FCNCA ) jumped 54% after reaching a deal to acquire loans and deposits of failed Silicon Valley Bank ( SIVB ). Meanwhile, the U.S. is reportedly mulling expanding an emergency lending facility for banks, which pushed First Republic Bank ( FRC ) 12% higher.

"A quiet weekend was a welcome relief for the bulls and many Wall Street banking analysts and reporters. Stocks indeed rallied from a lack of bad news and following First Republic agreeing to take on chunks of Silicon Valley Bank's book," Mike Zaccardi told Seeking Alpha. "Regional banks soared early on Monday, but I'm not impressed given intraday selling in the KRE ETF."

Zaccardi added: "But the broader tape was indicative of a risk-on environment - cyclicals jumped while large tech stocks, particularly semiconductor equities, gave back some of their March gains. But at what point do higher rates once again begin to pressure the market? We might get a glimpse on Friday when PCE inflation data crosses the wires."

Selling in the bond market sent yields higher. The 10-year Treasury yield ( US10Y ) advanced 16 basis points to 3.54% and the 2-year yield ( US2Y ) climbed 23 basis points at 4.00%.

Looking at notable movers outside the financial sector, Roku ( ROKU ) rose almost 6% after receiving an upgrade from Susquehanna, which argued the TV streamer would be a "prime beneficiary" of the connected TV trend .

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