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S&P 500 gains as investors weigh relief in banks, tech slip

Investing.com
·2 min read

By Yasin Ebrahim

Investing.com -- The S&P 500 rose Monday amid relief in banks after First Citizens BancShares struck a deal to purchase failed Silicon Valley Bank, though as slip in tech kept some gains in check.

The S&P 500 rose 0.56%, the Dow Jones Industrial Average rose 0.9% or 304 points, and the Nasdaq fell 0.1%.

First Citizens BancShares (NASDAQ:FCNCA) purchased all the remaining assets, deposits and loans of collapsed Silicon Valley Bank, or SVB, for $72 billion, representing a discount of $16.5B.

First Citizens BancShares, which is expected to move into the top 20 U.S. banks following the move, jumped more than 55%. As well as the SVB deal, reports that U.S. officials are exploring the Federal Reserve expanding its emergency lending facility to regional banks also boosted sentiment.

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Other regional banks surged, with First Republic Bank (NYSE:FRC) up 15%, Comerica (NYSE:CMA) up 6%, while Bank of America Corp (NYSE:BAC) gained 5%.

A stutter in tech kept gains in the broader market in check as Treasury yields had a rip-roaring start to the week after Federal Reserve Bank of St. Louis President James Bullard talked up the prospect of higher rates at a time when many in the market bet on cuts later this year.

“Bullard's comments over the weekend (ie: 5.75% terminal rate) may be contributing to higher short-term rate pressures,” Scotiabank Economics said in a note.

“[P]ricing for the May meeting has moved up by 5–6 basis points at the end of Friday to about 11bps now such that about half of a quarter point hike is being priced.”

Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) were in the red.

Pinterest (NYSE:PINS), meanwhile, was up more than 2% after UBS upgraded the social media stock to buy, with a price target of $35, up from $27, citing evidence of improved advertising efficiency.

“We think ad tech moves - including but not limited to partner monetization - stand to drive a step function improvement in revenue growth,” UBS said in a note.

Novartis (NYSE:NVS) jumped more than 7% after the drugmaker said results from its late-stage trial showed its breast cancer drug "significantly reduced" the risk of recurrence in women.

In cryptocurrency-related news, the Commodity Futures and Trading Commission filed a lawsuit on Monday against crypto exchange Binance and its co-founder, Changpeng Zhao, for allegedly selling unregistered crypto securities in the U.S.

The lawsuit comes just less than a week after the U.S. Securities and Exchange Commission threatened to sue Coinbase Global (NASDAQ:COIN) for allegedly listing unregistered securities.

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