Dow closes nearly 200 points higher, S&P 500 notches third straight advance as bank shares jump: Live updates

The Dow Jones Industrial Average rose Monday, building on last week’s gains, as investors attempted to move on from the crisis that broke out in the regional bank sector earlier this month following the collapse of Silicon Valley Bank.

The blue-chip stock index gained 194.55 points, or 0.6%, to end at 32,432.08. The S&P 500 was up 0.2% to 3,977.53. The Nasdaq Composite finished lower by 0.5% at 11,768.84.

Regional banks rose broadly. The SPDR S&P Regional Banking ETF (KRE) rose about 0.9%, after climbing more than 3% earlier in the day. First Republic surged 11.8%. PacWest also gained 3.4%.

“Market sentiment is improving as policymakers take steps to alleviate the recent challenges,” said Brian Levitt, global market strategist at Invesco. “An extension of the liquidity facility that had been set up by the Federal Reserve meaningfully eases prior concerns that a series of bank runs could be in the offing.”

A series of events helped sentiment in the sector. CNBC reported over the weekend that the deposit outflows from small banks to industry giants like JPMorgan Chase and Wells Fargo has slowed in recent days.

Also, Bloomberg News reported that U.S. authorities were considering expanding an emergency lending program for banks, which could give First Republic more time to shore up its liquidity. First Republic ended last week down 46.3% as investors contemplated whether the plan from a group of banks to deposit $30 billion would be enough to bolster its balance sheet.

And First Citizens BancShares agreed to buy large parts of Silicon Valley Bank, the U.S. Federal Deposit Insurance Corporation said overnight. The deal includes the purchase of approximately $72 billion of SVB assets at a discount of $16.5 billion, but around $90 billion in securities and other assets will remain “in receivership for disposition by the FDIC,” which is the acronym for the Federal Deposit Insurance Corporation.

“We continue to think that the Treasury has the capacity to provide a backstop for uninsured deposits if it becomes necessary,” Goldman Sachs’ Jan Hatzius said in a Monday note. “While we would not entirely rule out Treasury action if acute banking stress returns, the odds of a unilateral move from the Treasury appear very low.”

Deutsche Bank also rebounded by 4.7% after traders last week targeted the German lender following the forced takeover of Credit Suisse.

But technology shares fell as an increase in interest rates dampened hopes of a better outlook for growth stocks. Alphabet slid 2.8%, while Meta slipped 1.5%.

Wall Street was coming off a winning week despite volatility related to the Federal Reserve’s latest interest rate hike and the ongoing bank crisis. Despite the recent turmoil, the S&P 500 is on track to finish March flat and the first quarter ending on Friday with an increase of more than 3%.

Correction: An earlier headline on this article misstated the move in the Dow Jones Industrial Average.