Disorder reigns on Wall Street as banks thrive and tech sector struggles

The Dow Jones advanced 0.61%, the Nasdaq fell 0.47% and the broader S&P 500 index gleaned 0.17%.

The New York Stock Exchange ended on a mixed note on Monday, with on the one hand a rebound in banks helped by the announcement of the takeover of Silicon Valley Bank (SVB) and on the other profit taking on technology stocks, highly sought after in recent weeks.

The Dow Jones gained 0.61%, the Nasdaq index fell 0.47% and the broader S&P 500 index gained 0.17%.

The session was animated by the ride of the regional banks, which welcomed the announcement, the previous night, of the takeover of SVB by First Citizens, a brand based in Raleigh (North Carolina).

The latter gained 53.74% over the day, and approached its record, which dates from January 2022. Often considered, in recent days, as the new weak link in the financial system, the Californian bank First Republic has taken 11.81%.

Several regional institutions have also been favored by investors, such as Texan Comerica (+5.40%) and KeyCorp (+5.31%), parent company of the KeyBank network, whose headquarters are located in Cleveland (Ohio).

The giants of the sector also had the wind in their sails, like JPMorgan Chase (+2.87%) and Goldman Sachs (+1.91%), which helped the Dow Jones to do well.

“This suggests that investors are more comfortable with the situation of US banks,” commented Jack Ablin of Cresset Capital.

The VIX index, which measures market volatility, fell 5%.

The object of all the attention in the same way as bank shares, the bond market experienced a new upheaval, with many investors turning away from it to venture towards riskier horizons.

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The yield on 2-year US government bonds, which has been very volatile in recent weeks, has tightened violently, to 4.01%, against 3.76%.

Unlikely ray of sunshine from the banking crisis, technology stocks have been victims of profit taking, after two weeks in levitation.

Alphabet, which had notably taken more than 12% since the beginning of March, returned 2.83% on Monday. Meta (-1.54%) and Microsoft (-1.49%) also caught their breath.

“There’s a rotation (from tech stocks) into those bank stocks that had been abused,” Ablin said.

Another popular destination, to everyone’s surprise, since the beginning of the hiccups in the banking system, the cryptocurrency community also had a difficult day on Monday, but for other reasons.

The US financial derivatives regulator, the CFTC, has announced that it has taken the world’s largest cryptocurrency trading platform, Binance, and its boss Changpeng Zhao to court for deliberately circumventing US regulations.

The procedure follows a series of others initiated by US regulators to try to clean up an industry that has no legislative framework.

The news caused bitcoin to fall by almost 3% and dragged down the listed values ​​in the middle, whether it was the exchange platform Coinbase (-7.80%) and the specialist in “mining” of cryptocurrencies Riot Platforms (-6.84%).

Elsewhere, on the stock market, Manchester United was tackled by investors (-6.86%), the club’s latest takeover bids remaining well below the 6 billion pounds hoped for by the current owners, the Glazer family, who do not not rule out giving up selling.

The cruise line Carnival took on water (-4.77%), after publishing an annual loss forecast significantly higher than analysts’ projections.

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Indicted on Thursday by the alternative fund Hindenburg Research, which accuses it of misleading communication to its shareholders, the electronic payments group Block resurfaced (+ 6.13%), after losing more than 16% over two sessions .

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