The Dow Jones Industrial Average rose 283.97 points, or 0.9%, to $32,521.50; The S&P 500 Index was up 27.07 points, or 0.7%, at 3,998.06; and the Nasdaq Composite was up 34.75 points, or 0.3%, at 11,858.71.
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First Citizens BancShares Inc will acquire parts of Silicon Valley Bank, which plunged earlier this month into the biggest bank failure since the 2008 financial crisis, sparking fears about liquidity problems in the sector.
The shares of First Citizens shot up 44.7%, while those of First Republic Bank gained 27% after learning that the US authorities are studying the possibility of granting more aid to banks, which could give the embattled regional lender more time to shore up its balance sheet.
“The news about the purchase of SVB could calm the nervousness in the banking sector”, said Randy Frederick of Charles Schwab. “Every bank that gets involved with the FDIC (Federal Deposit Insurance Corporation) and gets resolved in a way that people don’t lose money adds another element of confidence to the industry, and hopefully people calm down.”
Regional banks Western Alliance Bancorp and PacWest Bancorp were also up 4.8% and 6% respectively.
Stocks of major US banks JPMorgan Chase & Co, Citigroup and Bank of America were up between 1.6% and 3.3%.
The KBW Regional Banking Index rose 2.2%, while the S&P Banking measure gained almost 3%. Financials, up nearly 2%, led sector gains, with 10 of the 11 S&P 500 sector indices up.
Source: Ambito
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