U.S. stocks rose on Monday, while bank stocks also rose after North Carolina-based bank First Citizens (FCNCA) agreed to buy most of Silicon Valley Bank.
The S&P 500 (^GSPC) was up 0.6% and the Dow Jones Industrial Average (^DJI) was up 0.9%. The Nasdaq Composite (^IXIC) gained 0.3%.
Bond yields rallied. Yield on the benchmark 10-year Treasury bond rose to 3.5% on Monday morning. WTI Crude Oil rose $70 a barrel.
Equities ended a volatile week with gains on Friday, in a week that saw the US Federal Reserve raise interest rates by 0.25%, while pressure in the US and European banking sectors remained a focus for investors. Deutsche Bank (DB) shares came under pressure on Friday after the cost of insuring the bank against a loan default skyrocketed overnight. Major stock indexes all ended a strong week, with the Dow Jones up 1.2% on average, the S&P 500 up 1.4% and the Nasdaq Composite closing up 1.7%.
Banks will once again dominate the headlines this week when earnings and economic calendars are in the light. The Senate Banking Committee will hold a bank failure hearing on Tuesday, with the witness list including FDIC Chairman Martin Gruenberg, Federal Reserve Vice Chairman Michael Barr and Undersecretary of the Treasury Department Nellie Liang.
“Looking ahead, the banking sector is clearly set to head this week as we near the end of the month on Thursday. The data will be a bit secondary as it is too early to assess the impact of the mini-crisis so far,” wrote Jim Reid and colleagues at Deutsche Bank in a note to clients.
Bank sentiment gained momentum on Monday morning. Regional bank stocks trading higher Monday morning include First Republic Bank (FRC), PacWest Bancorp (PACW), Western Alliance Bancorporation (WAL), Zions Bancorporation (ZION) and Regions Financial (RF).
Wall Street heavyweights led by JPMorgan (JPM) have been trying for more than a week to raise capital for First Republic, which has a $30 billion cash lifeline amid the failure of regional lenders Silicon Valley Bank and Signature bank included.
The story goes on
Meanwhile, First Citizens Bank has entered into an agreement to purchase all of Silicon Valley Bank’s loans and deposits, according to an announcement by the Federal Deposit Insurance Corporation (FDIC). The North Carolina-based lender’s assets will nearly double after the acquisition. The 17 branches that once belonged to Silicon Valley Bank will open as branches of First Citizens Bank starting Monday. First Citizens Bank (FCNCA) shares are up more than 46% Monday morning.
An illustrative stock chart and First Citizens BancShares logo displayed on a phone screen can be seen in this multiple exposure illustrative photo taken on March 20, 2023 in Krakow, Poland. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Shares of major banks also rose, including Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C).
On the economic front, a pulse check for US consumers will come from the Conference Board consumer confidence gauge on Wednesday. Then, at the end of the week, the key data point and the Fed’s preferred measure of inflation, the PCE, is scheduled for Friday’s release. Economists expect personal income to come in at 0.3% in February, slightly lower than January’s 0.6%. Personal spending is expected to hit 0.3%, down from 1.8% in January.
This week’s earnings calendar includes results from Micron Technology (MU), Lululemon (LULU), RH (RH) and Cal-Maine Foods (CALM).
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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