Wall Street ends in disarray, banks still in disarray

(Reuters) – The New York Stock Exchange ended in mixed order on Monday, still penalized by banking stocks despite statements aimed at containing the risk of contagion after the collapse of Silicon Valley Bank (SVB), but some sectors benefited from the prospect of a less aggressive Fed on its interest rates.

The Dow Jones index fell 0.31%, or -99.77 points, to 31,809.87 points. The broader Standard & Poor’s 500 lost 6.62 points, or -0.17% to 3,854.97 points. The Nasdaq Composite advanced for its part by 49.96 points (+0.44%) to 11,187.56.

SVB’s setbacks have put the banking sector under pressure with, since then, a second bank, Signature Bank, particularly exposed to cryptocurrencies, closed by the American regulator this weekend.

The banking arm of the S&P index lost 7%, its biggest daily drop since June 2020.

Short-term US bond yields, the most sensitive to changes in the path of rates, fell sharply on Monday as the SVB collapse paved the way for a possible lull in central bank monetary tightening.

The yield on two-year US Treasuries plunged 57 basis points, to 4.0158%.

The defensive utilities sector was one of the best performers of the S&P’s 11 major sectors, while interest rate-sensitive groups such as real estate and technology also rose.

For some investors, the Fed’s decision next week will also depend on inflation data expected this week.

“If the consumer price index and the producer price index are outrageously bad, the Fed will find itself in a difficult situation, if not much more difficult than before these figures,” said Timothy Holland, of Orion AdvisorSolutions.

President Joe Biden has promised to do whatever is necessary to address the threat to the banking system.


First Republic Bank fell sharply, by 61.8%, as news of new financing did not reassure investors, as did Western Alliance Bancorp (-47.1%) and PacWest Bancorp (-21.1 %). Transactions in these securities have been interrupted several times.

Shares of major US banks JPMorgan Chase & Co, Citigroup, and Wells Fargo lost between 1.8% and 7.4%.

On the upside, Pfizer took 1.2% after announcing an agreement to acquire the biotechnology company Seagen for around 43 billion dollars (40.29 billion euros).

(Written by Kate Entringer)