New York’s Dow Jones Stock Exchange closed up more than 300 points on Tuesday (March 14) as investors eased after US and global governments said they could contain the banking crisis. Weaker US inflation also supported expectations. that The US Federal Reserve (Fed) is slowing raising interest rates.
The Dow Jones Industrial Average closed at 32,155.40, up 336.26 points, or +1.06%, the S&P 500 closed at 3,919.29, up 63.53 points, or +1.65%, and the Nasdaq closed at 11,428.19, up 2,428.19.1. up 2,428.19.1, up 2%, +3.
Investors eased worries about a banking crisis caused by the bankruptcies of Silicon Valley Bank (SVB) and Signature Bank (SB) after US President Joe Biden and Government agencies around the world vowed to keep the crisis from spreading and damaging’ the banking system.
The United States has announced emergency measures to help those affected by the crisis. The US Treasury Department confirmed that Citizens who deposit with SVB and SB have full access to their deposits. The Fed announced the creation of a “Bank Term Funding Program” to protect other financial institutions. Not affected by the bankruptcy of SVB and SB.
The market was also driven by expectations that the Fed will raise interest rates by only 0.25% to a range of 4.75-5.00% at its March 21-22 meeting, instead of the previously expected 0.50%. After the United States released the Consumer Price Index (CPI), which is a measure of consumer spending inflation. slowed down in February. This, together with the Fed’s concern that a sudden rate increase will hurt the banking sector, is facing a current liquidity crisis.
The headline CPI, which includes food and energy, rose 6.0 percent in February year-on-year. That slowed from 6.2 percent in January, and core CPI excluding food and energy rose 5.5 percent in February year-on-year. This slowed by 5.6% in January.
The CBOE Volatility Index (VIX), which is a measure of investor anxiety in the US stock markets, fell 10.52 percent to 23.73 overnight after reaching 29.03 on Monday The stock market is very risky and volatile.
All 11 stocks that make up the S&P 500 ended in positive territory, with the communications services index up 2.75 percent and the banking sector 2.6 percent higher after Monday’s sharp drop.
Shares of First Republic Bank (FRB), a US regional bank, rose 26.98 percent after FRB sent a letter to clients assuring the bank that it remains capital strong. and above the level set by law
Other regional bank stocks also rebounded PacWest rose 33.85%, KeyCorp rose 6.57% and Western Alliance Bancorp rose 14.36%
Meta Platforms, the parent company of Facebook and Instagram, rose 7.25% after Mr. Zuckerberg CEO Meta announced 10,000 layoffs yesterday.
Uber Technologies and Lyft, the app-based ride-hailing service, rose 5 percent and 0.6 percent, respectively, after a California court allowed the two companies to handle motorists in the United States. instead of being treated as an employee
