Stocks rallied on Thursday after a group of big banks offered a lifeline to a bank Wall Street had zeroed in on in its hunt for the next victim in the industry’s struggles, per the AP. The benchmark S&P 500 jumped nearly 2% Thursday, erasing earlier losses following reports that First Republic Bank could get help or sell itself to another bank.
- The S&P rose 68 points, or 1.7%, to 3,960.
- The Dow rose 371 points, or 1.1%, to 32,246.
- The Nasdaq rose 283 points, or 2.4%, to 11,717.
This week has been a whirlwind for markets on worries about banks that may be bending under the weight of the fastest set of hikes to interest rates in decades. The concerns have been flaring since Friday's collapse of Silicon Valley Bank, which was the second-largest bank failure in US history. Since then, Wall Street has tried to root out banks with similar traits, such as lots of depositors with more than the $250,000 limit on the amount insured by the Federal Deposit Insurance Corp., or lots of tech startups and other highly connected people that can spread worries about a bank’s strength quickly.
First Republic Bank has been at the center of the market’s swivels, and it rose 14.5% after slumping as much as 36% earlier in the day. A group of 11 of the country's biggest banks said they would deposit $30 billion at the bank in a move that “reflects their confidence in First Republic and in banks of all sizes.” Financial stocks across the S&P 500 flipped from losses in the morning to gains by midday on what CNBC calls a "vote of confidence." Treasury yields also strengthened suddenly, a sign of increased confidence from the bond market.
(Read more stock market