Stock market news today: Stocks waver, bond yields rise | March 28, 2023

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U.S. stocks wavered on Tuesday during midday trading, while bond yields continued to extend gains as investors monitored the latest developments in the banking sector after the sale of Silicon Valley Bank.

Checking in with the indexes around 12:35 p.m. ET, the S&P 500 (^GSPC) ticked down by 0.2% and the Dow Jones Industrial Average (^DJI) edged up 0.1%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) down 0.7%.

Bond yields moved higher. The yield on the benchmark 10-year U.S. Treasury note moved to about 3.56% on Tuesday morning. WTI crude oil (CL=F) rose more than 5% to start the week, ticking up to above $73 a barrel.

Stocks ended Monday mixed, after North Carolina-based First Citizens (FCNCA) bank bought Silicon Valley Bank. Communication services, tech, and real estate were the only sectors to finish the day lower; the former two sectors also dragged on the Nasdaq, resulting in the tech-heavy index to fall 0.5%, according to Bespoke Investments.

Meanwhile, SVB’s fallout will cost the FDIC’s Deposit Insurance Fund about $20 billion. The deal sent bank stocks in rebound mode, with the KBW Nasdaq Bank Index (^BKX) closing over 2.5% higher.

Banks will continue to dominate the headlines again this week with the earnings and economic calendars in light. The FDIC Chairman Martin Gruenberg, Federal Reserve Vice Chairman Michael Barr, and Treasury Undersecretary Nellie Liang are set to testify at a Senate Banking Committee hearing Tuesday about the collapse of SVB and Signature Bank.

Treasury Undersecretary Nellie Liang wrote in a statement ahead of the hearing on Monday night that she supports these reviews and looks forward to learning about regulatory responses.

“We must ensure that our bank regulatory policies and supervision are appropriate for the risks and challenges that banks face today,” Liang's testimony reads.

“If bank contagion fears subside, then we may see a resurgence in both bond yields and commodities as growth, before the banking crises, was stronger than expected led by the US and a reopened China,” wrote the U.S. market intelligence team at JPMorgan in a note.

However, banking crises typically have wide-ranging, and negative, impacts on growth and employment,” the team added.

Bank sentiment turned sour. Regional bank stocks are trading down Tuesday including First Republic Bank (FRC), PacWest Bancorp (PACW), Western Alliance Bancorporation (WAL), and Regions Financial (RF). Meanwhile, Zions Bancorporation (ZION) stock trades upward during the midday trading session.

Big bank stocks continued to get a slight bounce, including JPMorgan Chase (JPM). However, other stocks including Bank of America (BAC),Wells Fargo (WFC) and Citigroup (C) edged lower on Tuesday during midday trading.

Meanwhile, the largest money managers have signaled that the Federal Reserve will continue to raise rates despite trader’s recent bets amid the bank fallouts, according to BlackRock.

BlackRock Investment Institute strategists, including Wei Li, wrote in a client note that the Fed and its peers have made it clear that the troubles in the banking sector won’t detract from its battle against inflation.

Separately, there’s speculation that Charles Schwab (SCHW) could be the next name to follow in the banking sector’s troubles, Bloomberg reports. This comes as higher interest rates have pushed some investors to move cash out of certain accounts, which bolster Schwab’s bottom line and business.

Here are some trending tickers on Yahoo Finance:

Occidental Petroleum (OXY): Billionaire investor Warren Buffett increased his shares in his preferred energy group.

Lyft (LYFT): The company named former Amazon executive David Risher as its CEO. The ride-hailing company’s co founders Logan Green and John Zimmer stepped down from their respective roles of CEO and president.

Alibaba (BABA): The Chinese tech giant announced its plans to split its business into six independently run entities, signaling the biggest structural change in its history.

Paramount (PARA): Bank of America analysts upgraded the stock calling the company “a shopping list of attractive assets."

Walgreens (WBA): The pharmaceutical giant reported second-quarter results that beat expectations and maintained it’s profit guidance.

On the economic front, February wholesale inventories gained 0.2% compared to economists expectations of 0.1% and retail inventories climbed 0.8%, the strongest reading since August, higher than expectations of 0.2%.

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