Respaldo al First Republic Bank boosted on Wall Street

NEW YORK (AP) — Stock prices on the New York Stock Exchange closed higher on Thursday after a group of big banks offered a lifeline to First Republic Bank, which investors suspected was the industry’s next casualty.

The S&P 500 rose 1.8%, its best day in nearly two months, after 11 of the largest US banks announced they would deposit $30 billion with First Republic Bank. The Dow Jones industrial average rebounded from an early 300-point loss to gain 371, or 1.2%, while the Nasdaq composite rose 2.5%.

This week has been a whirlwind for markets around the world, worried about banks collapsing under the weight of the fastest round of US interest rate hikes in decades. Fears have been growing since the bankruptcy Friday of Silicon Valley Bank, the second largest in the country’s history.

Since then, Wall Street has attempted to root out banks with similar characteristics. These include the presence among its customers of many depositors with more than $250,000 – the limit insured by the Federal Deposit Insurance Corporation – or many well-connected technology companies and others who can quickly spread concerns. about the soundness of a bank.

First Republic Bank has been at the center of market fluctuations. On Thursday, its shares rose 10% after plunging as much as 36% earlier in the day. In the statement announcing their deposits, the group of 11 banks said the move “reflects their confidence in the First Republic and in banks of all sizes”.

In addition to equities, Treasury yields also suddenly strengthened following early reports of the First Republic bailout. This was a sign of increased confidence from the bond market. The yield on 10-year bonds fell from 3.47% to 3.57%.

In total, the S&P 500 gained 68.35 points to end at 3,960.28, the Dow rose 371.98 to 32,246.55 and the Nasdaq rose 283.22 to 11,717, 28.

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Associated Press writers Joe McDonald and Matt Ott contributed to this report.