Dow, S&P 500 Add To Last Week's Gains, Nasdaq Gives Back Ground

After posting strong gains last week, the major U.S. stock indexes turned in a mixed performance during trading on Monday.

While the major averages all moved to the upside in early trading, the tech-heavy Nasdaq swung back and forth across the unchanged line before closing in negative territory.

The Nasdaq slid 55.12 points or 0.5 percent to 11,768.83, while the Dow climbed 194.55 points or 0.6 percent to 32,432.08 and the S&P 500 rose 6.54 points or 0.2 percent to 3,977.53.

The early strength on Wall Street came as traders looked to build on last week’s gains as fears of a global banking crisis once again eased following the latest developments in the sector.

Shares of First Citizens BancShares (FCNCA) skyrocketed after the company an agreement with the FDIC to purchase substantially all deposits and loans of failed Silicon Valley Bridge Bank.

The FDIC said the transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank’s assets at a discount of $16.5 billion.

U.S.-listed shares of Deutsche Bank (DB) also showed a strong move back to the upside after German Chancellor Olaf Scholz noted the bank remains profitable and said there’s no reason to doubt its future.

Additionally, a report from Bloomberg said U.S. authorities are considering expanding an emergency lending facility for banks in ways that would give First Republic Bank (FRC) more time to shore up its balance sheet.

Officials have yet to decide on what support they could provide First Republic and an expansion of the Federal Reserve’s offering is one of several options being weighed at this early stage, Bloomberg said, citing people with knowledge of the situation.

Buying interest waned over the course of the session, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Later in the week, traders are likely to keep a close eye on a report on personal income and spending in the month of February, as it includes a reading on inflation said to be preferred by the Federal Reserve.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

Sector News

Energy stocks moved sharply higher over the course of the session, benefitting from a substantial increase by the price of crude oil.

With crude for May delivery soaring $3.55 to $72.81 a barrel, the Philadelphia Oil Service Index spiked by 4.3 percent and the NYSE Arca Oil Index shot up by 2.5 percent.

Significant strength was also visible among banking stocks, as reflected by the 2.5 percent surge by the KBW Bank Index.

Brokerage, airline and pharmaceutical stocks also saw notable strength, while weakness among semiconductor and software stocks weighed on the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index jumped by 1.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both advanced by 0.9 percent.

In the bond market, treasuries saw a substantial pullback after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 14.8 basis points to 3.528 percent.

Looking Ahead

Developments in the banking sector are likely to remain in focus on Tuesday, while traders are also likely to keep an eye on a report on consumer confidence.

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