The Dow Jones Industrial Average rose into Monday's noon hour after early volatility, trying to recoup last week's steep sell-off. Investors remain on high alert, cautious about the banking crisis that triggered the SVB collapse. Depositors at the closed bank now have access to their money through an FDIC bridge bank created with "normal banking hours and activities, including online banking."
The crash of crypto firm Silvergate added to market woes while regulators also closed Signature Bank, which also held significant crypto exposure. Crypto exchange Coinbase stated it had $240 million in cash with Signature Bank.
Depositors will have their money back under the "systemic risk exemption" rules that cover SBNY as well.
Treasury Secretary Janet Yellen, Fed Chair Jerome Powell and FDIC Chair Martin Gruenberg stated that any loss to FDIC as a result of supporting depositors who had more than the $250,000 limit will be recovered "by a special assessment on banks, as required by law." Shareholders will not be protected.
Backstopping some risks of contagion, a new "Bank Term Funding Program" will offer loans of up to one year, backed by U.S. Treasuries, to FDIC member banks.
Charles Schwab dived nearly 20% and pared losses after a Citibank upgrade from neutral to buy, with a 75 price target.
Dow Jones leader JPMorgan Chase and Bank of America fell. Regional bank First Republic cratered over 60%. The SPDR S&P Regional Banking ETF fell more than 9%.
Health care stocks UnitedHealth Group and Johnson & Johnson fared better in the Dow, along with defensive plays Walmart and Home Depot.
The yield on the benchmark 10-year Treasury note dropped 20 basis points to 3.49% as investors sought safe haven. Gold and Bitcoin rose. The S&P Volatility Index eased to a 4% gain after surging 16% to a five-month high near 30.
Economic Data: Analysts' Take
Tuesday and Wednesday inflation numbers are on watch as well. Analysts expect inflation to ease to 6.0% from January's 6.1%. Odds for a 25 basis point hike in March stand at 47.6%, according to the CME FedWatch Tool. However, analysts at Goldman Sachs believe the Fed will pause rate hikes at the meeting. The dollar dipped on Monday.
The S&P 500 rose at 12 p.m. ET on Monday. Real estate, health care and utilities sectors gained.
Shares of Tesla were flat after Wolfe Research analyst Rod Lache downgraded the stock to hold from buy while not changing the 185 price target for the EV stock.
The Nasdaq was the biggest gainer at noon. Shares of Illumina led with hefty gains. Activist investor Carl Icahn is bidding for three seats on the company's board, according to Wall Street Journal reports. Moderna and Regeneron Pharmaceuticals also rose at the hour.
Volume rose on the Nasdaq and the NYSE compared to the same time on Friday.
Crude oil dived nearly 3% to trade at $74.69 per barrel.
Stocks Moving Today Outside Dow Jones
Insulet rose as it stepped up to replace SIVB in the S&P 500 index. Seagen broke out of a cup-with-handle base as Pfizer announced plans to buy the cancer drug giant for $43 billion.
Earnings continue this week with reports from Array Technologies, Catalyst Pharma, Five Below, FedEx, Adobe and Dollar General. FDX fell while ARRY, FIVE, CPRX and DG rose.
Palo Alto Networks is on watch as it holds its 21-day line. Iridium Communications retook its 50-day line. Both are on IBD Leaderboard.
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