Stocks rallied Tuesday, led by the banks most beaten down by the industry's crisis, and some of Wall Street's fear washed out on hopes the federal government will offer more help if needed. The S&P 500 posted its first back-to-back gain since Silicon Valley Bank's quicksilver failure began two weeks ago, the AP reports.
- The S&P 500 rose 51.30 points, or 1.3%, to 4,002.87.
- The Dow rose 316.02 points, or 1%, to 32,560.60.
- The Nasdaq rose 184.57 points, or 1.6%, to 11,860.11.
Markets around the world have pinballed sharply this month on worries the banking system may be cracking under the pressure of the fastest set of hikes to interest rates in decades. This week's rally now runs into a huge test: On Wednesday afternoon, the Federal Reserve will announce what's largely expected to be its latest increase to rates. Tuesday's stocks performance came after Treasury Secretary Janet Yellen told a bankers group that more government assistance "could be warranted" if risks arise that could bring down the system. That could mean making sure customers at a weakened bank get all their money, even those with more than the $250,000 limit insured by the Federal Deposit Insurance Corp.
"Janet Yellen coming out and saying should other deposits need to be protected, they're willing and able to do that, I think that's a very strong statement," said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth. "And so markets have been able to calm down." Earlier this month, the federal government said it would make all depositors at Silicon Valley Bank and Signature Bank whole. They were the second- and third-largest US bank failures in history. First Republic Bank, which shares some traits with Silicon Valley Bank, jumped 29.5% on Tuesday. Its stock had lost 90% for the month through Monday. Small and mid-size banks also rallied.
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