Banks lead stock gains after First Citizens buys SVB assets

News Summary

  • Their world has become much more difficult because interest rates have jumped very high very quickly.The Federal Reserve and other central banks announced their latest increases to interest rates in recent weeks as they fight inflation that’s still gripping worldwide.
  • Investors have been hunting for which banks could be next to fall as the system creaks under the pressure of much higher interest rates.Still, financial stocks were among the biggest gainers Monday.
  • She said actions by central banks and other regulators have helped to ease strains on markets, “but uncertainty is high, which underscores the need for vigilance.”The Fed has hinted it may raise rates just one more time this year before leaving them alone for a while.
  • Banks and energy stocks led the gainers in the benchmark index, outweighing losses in technology and communications companies.The Dow Jones Industrial Average rose 0.6%, while the Nasdaq composite fell 0.5%, reflecting losses in Google parent Alphabet and other tech companies.
  • Many are betting the central bank will have to cut rates as soon as this summer to prop up the economy.Such hopes for rate cuts have helped stocks recently despite all the bank turmoil.
  • It was above 4% earlier this month.Lower rates can act like steroids for stocks, and technology and other high-growth stocks tend to get a particularly big boost.
By STAN CHOE and DAMIAN J. TROISE AP Business WritersNEW YORK (AP) Socks are rising on Wall Street Monday as battered banks show more strength, at least for now.The S&P 500 was 0.6% higher [+4930 chars]