Stock market news today: Stocks fall, bond yields rise
Here's what's moving markets on Tuesday, March 28, 2023.
U.S. stocks turned sour on Tuesday, while bond yields continued to extend gains as investors monitored the latest developments in the banking sector after the sale of Silicon Valley Bank.
The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) declined 0.1%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) turned red by 0.5%.
Bond yields moved higher. The yield on the benchmark 10-year U.S. Treasury note moved to about 3.56% on Tuesday. On front end of the yield curve, two-year yields jumped over 4%. WTI crude oil (CL=F) rose more than 5% to start the week on Monday, and it ticked up to above $73 a barrel Tuesday.
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.
Shares of First Citizens jumped to a record high, extending gains for the second consecutive day on Tuesday after acquiring the deposits and loans of SVB. Meanwhile, shares of SVB Financial, which were delisted on the New York Stock Exchange, began trading over the counter for less than 30 cents.
As banks dominated the headlines again this week, federal regulators were slammed with intense questions from lawmakers on Tuesday regarding the collapse of SVB and Signature Bank. All three regulators agreed that financial regulations need to be tightened following the recent turmoil.
“I anticipate the need to strengthen capital and liquidity standards for banks with over $100 billion,” Federal Reserve Vice Chair for Supervision Michael Barr said at the Senate Banking Committee hearing, responding to Democratic Senator Elizabeth Warren's question.
During the hearing, lawmakers also pressed on the issue that executives of the banks should face consequences leading up to the failures.
The House Financial Services Committee will hold its own hearing on Wednesday and question Barr, FDIC Chairman Martin Gruenberg, and Treasury Undersecretary Nellie Liang.
“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 red on Tuesday. Regional bank stocks traded down Tuesday, including First Republic Bank (FRC), PacWest Bancorp (PACW), and Western Alliance Bancorporation (WAL).
Big bank stocks including Bank of America (BAC), Wells Fargo (WFC) also moved lower, while Citigroup (C), and JPMorgan Chase (JPM) traded up.
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."
AMC Entertainment Holdings, Inc. (AMC): Reports swirling around that the e-commerce giant Amazon.com Inc was looking to buy the theater chain.
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%.
Separately, home prices logged their seventh consecutive monthly decline in January as rising interest rates continue to pressure prices and the housing market overall. Meanwhile, the consumer pulse notched upward to 104.2 in March, higher than the prior month, according to the Conference Board.
Elsewhere, in the cryptocurrency world, Binance's regulator case is spilling beyond Changpeng Zhao’s company, Bloomberg reports, raising the stakes for American firms that worked with the exchange.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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