US stocks closed Monday with little change as traders watched First Republic Bank’s (FRC.N) weekend auction and readied themselves for the Federal Reserve’s anticipated interest rate hike this week.
The shares of JPMorgan Chase & Co. (JPM.N), which won the auction of insolvent lender First Republic, increased 2.1% while the KBW regional banking index (.KRX) fell 2.7%. To gain ownership of the majority of the assets of the local bank, JPMorgan will pay the U.S. Federal Deposit Insurance Corp $10.6 billion.
Due to the failure of two other regional banks in March, investors have been concerned about the stability of the banking sector.
Tim Ghriskey, senior portfolio strategist at, said: “Hopefully this is sort of the last of the banking crisis, but something else might surface at some point.”
Market observers also absorbed the most recent economic information, which led some to speculate that the Fed could need to continue its tightening cycle for the foreseeable future. On Monday, the Institute for Supply Management (ISM) reported that its manufacturing PMI increased from March to April.
On Wednesday, the Fed is anticipated to raise rates by an extra 25 basis points, continuing its policy of hiking rates to control inflation.
The S&P 500 (.SPX) dropped 1.61 points, or 0.04%, to 4,167.87, the Dow Jones Industrial Average (.DJI) dropped 46.46 points, or 0.14%, to 34,051.7, and the Nasdaq Composite (.IXIC) sank 13.99 points, or 0.11%, to 12,212.60.
Energy (.SPNY), which is one of the key S&P 500 sectors, experienced the biggest decline, plunging 1.3%.
The Dow Jones Industrial Average (.DJI) fell 46.46 points, or 0.14%, to 34,051.7; the S&P 500 (.SPX) lost 1.61 points, or 0.04%, at 4,167.87; and the Nasdaq Composite (.IXIC) dropped 13.99 points, or 0.11%, to 12,212.60.
Energy (.SPNY) was down the most of the major S&P 500 sectors, falling 1.3% as crude oil prices declined , .
However, recent earnings gave investors some cause for hope, according to Ghriskey. Most S&P 500 firms’ first-quarter results exceeded expectations, allaying fears about the state of the economy.
Our earnings have exceeded expectations. For the time being, analysts have refrained from decreasing estimates,” he remarked. “It’s very encouraging if we could have rates at this level… and corporate America continue to deliver.”
Alphabet Inc. (GOOGL.O), Microsoft Corp. (MSFT.O), and Meta Platforms Inc. (META.O) recently reported positive earnings, which helped the benchmark S&P 500 record increases for the second straight month on Friday.
On Monday, the S&P 500 technology index (.SPLRCT) increased 0.2%, partially offsetting the day’s decline.
Compared to the 10.37 billion average for the entire session over the previous 20 trading days, volume on U.S. exchanges was 10.24 billion shares.
On the NYSE, the ratio of declining issues to advancing issues was 1.36 to 1; on the Nasdaq, the ratio was 1.17 to 1. In comparison to the Nasdaq Composite, the S&P 500 posted 35 new 52-week highs and one new low.
