The New York stock market ended in a strong rise on Thursdayin better spirits after the intervention of a group of US banks to rescue the First Republic, in a new movement that seeks to stabilize the financial sector.
Eleven US banks, including Bank of America, Citigroup and JPMorganagreed to place $30 billion in deposits with First Republic, a sign of his “confidence in the banking system” of the countryaccording to a joint statement.
The day that opened in red, in an extremely volatile environment, ended in positive territory due to a very optimistic rebound. The Dow Jones gained 1.17%, the tech-heavy Nasdaq 2.48% and the broad S&P 500 index rose 1.76%.
Precisely, the indices reversed the trend after it became known that a group of banks could rescue the First Republic from eventual bankruptcy, an intervention that finally occurred. Before, the European Central Bank said it was ready to intervene at any time in the event of a new deterioration.
The US Federal Reserve (Fed, central bank) also acted on Sunday to guarantee all deposits in the banking system after three bank failures in less than a week in the country.
Contagion fears had spread to Europe on Wednesday. In Switzerland, Credit Suisse entered the storm and collapsed 24.2% on the stock market. This Thursday its action recovered after the entity announced in the early hours of Thursday, European time, that it will borrow up to US $ 50,000 million Swiss francs from the central bank.
First Republic gained nearly 10% at the close after losing nearly 36% early in the day. Many regional banks recovered ground, such as Western Alliance (+14.1%), Bank of Hawaii (+10.7%) or Valley National (+8.3%). And the big banks also closed positively, such as Bank of America (+3.5%) or Wells Fargo (+3.8%), both part of the First Republic rescue group.
Risk appetite seemed to return, favoring the technology sector, with gains for Microsoft (+4.1%), Alphabet (+4.7%) and Amazon (+4%)which boosted the Nasdaq, which has been positive for four sessions despite the turbulence.
Source: Ambito
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