U.S. stocks rise as fears about banking system fade
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By Liz Moyer
Investing.com -- U.S. stocks were rising as fears about the banking sector subsided and investors took on a new appetite for risk.
At 9:46 ET (13:46 GMT), the Dow Jones Industrial Average rose 239 points or 0.7%, while the S&P 500 was up 1% and the NASDAQ Composite was up 1.3%.
The worries about the banking sector eased after last weekend’s deal by First Citizens BancShares Inc (NASDAQ: FCNCA) to buy parts of Silicon Valley Bank, which collapsed in early March. Bank regulators will appear in Congress today to talk about that collapse and that of Signature Bank, as lawmakers question their oversight.
Michael Barr, the Fed's vice chair for supervision, told lawmakers on Tuesday that Silicon Valley Bank was a “textbook case of mismanagement.”
The banking turmoil changed the market’s views on the direction of interest rates. Futures traders are now divided on whether the Federal Reserve will raise rates by another quarter of a percentage point when it meets in May or whether it will leave rates the same.
The Fed’s own economic forecasts have the benchmark rate topping out at 5.1% this year, which suggests room for another rate hike from the current target rate of 4.75% to 5%.
Shares of athleisure maker Lululemon Athletica Inc (NASDAQ: LULU) rose 14% after it beat expectations and forecast better-than-expected first-quarter and full-year results.
UBS Group AG (NYSE: UBS) shares rose 4% after the Swiss banking giant said Sergio Ermotti is returning as CEO after its acquisition of Credit Suisse.
Oil was rising. Crude Oil WTI Futures were up 1.1% to $74.02 a barrel while Brent Oil Futures crude was up 0.7% to $78.69 a barrel. Gold Futures fell 0.3% to $1,983.
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