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Wall St mixed as banking worries ebb, Treasury yields rise

2023-03-28T16:34:16Z

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 27, 2023. REUTERS/Brendan McDermid

Wall Street struggled for direction on Tuesday as investors weighed receding concerns about a banking crisis, while Treasury yields rose amid focus on Federal Reserve’s interest rate trajectory.

Growth stocks such as Microsoft Corp (MSFT.O), Alphabet Inc (GOOGL.O), Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) remained under pressure, falling between 0.8% and 1.5% as yields rose.

Money market bets are now split between the Fed raising interest rates by 25 basis points and a pause in its policy meeting in May, after being largely tilted towards a no-hike scenario at the end of last week. Investors expect a sharp easing in rates thereafter.

Strategists said that as lenders report quarterly results from next month, the market will learn more details about the health of banks following the collapse of some big regional lenders that fanned fears of a sector-wide contagion.

Shares of First Citizens BancShares Inc (FCNCA.O)
climbed 3.7%, following a more than 50% surge on Monday after it said it would acquire the deposits and loans of Silicon Valley Bank, whose collapse earlier this month sparked a selloff in the sector.

The KBW regional banking index (.KRX) added 0.3%, while among the big U.S. banks JP Morgan Chase & Co (JPM.N) was up 0.4%, while Bank of America (BAC.N) was down 0.5%.

“The good news is that folks pulling deposits out, that’s starting to taper off from a couple weeks ago and maybe some of those uninsured deposits are moving money around,” said Jonathan Waite, fund manager at Frost Investment Advisors.

U.S. Fed’s head of banking supervision Michael Barr told lawmakers on Tuesday that it was appropriate for outsiders to conduct independent reviews of the central bank’s oversight of Silicon Valley Bank, in addition to the regulator’s own internal review.

At 11:59 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 83.69 points, or 0.26%, at 32,515.77, the S&P 500 (.SPX) was down 2.49 points, or 0.06%, at 3,975.04, and the Nasdaq Composite (.IXIC) was down 63.64 points, or 0.54%, at 11,705.20.

Alibaba Group Holding jumped 11.5% after the firm said it plans to split its business into six main units covering e-commerce, media and the cloud.

Walgreens Boots Alliance Inc (WBA.O) added 4.34% after the U.S. pharmacy’s quarterly profit beat Wall Street expectations.

U.S. consumer confidence unexpectedly increased in March, with the index rising to 104.2 this month from a reading of 103.4 in February but Americans are becoming a bit anxious about the labor market, Conference Board’s survey showed on Tuesday.

Advancing issues outnumbered decliners by a 1.94-to-1 ratio on the NYSE, while decliners outnumbered advancers by a 1.05-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 25 new highs and 86 new lows.

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