SVB rescue plan reversed by Dow Jones; First Republic, Charles Schwab crash on bank fears

dow jones reverses on svb rescue plan

On Monday, the Dow Jones Industrial Average rebounded amidst worldwide market turbulence caused by the persistent crisis in American banks. One of these troubled institutions, SVB Financial (SIVB), was reassured by the FDIC and other financial regulators that all deposits were guaranteed. Signature Bank (SBNY) was also placed under regulatory control on Sunday. Another San Francisco-based bank, First Republic (FRC), experienced a devastating 77% drop in morning trading, despite receiving additional funding from JPMorgan (JPM) and the Federal Reserve. Additionally, Charles Schwab’s stock value (SCHW) plummeted 20%, due to ongoing concerns about banking instability.

On Tuesday, the consumer price index will be watched closely. It is expected to rise 0.4%, both overall and excluding food and energy. As a result, headline CPI inflation would fall to 6% from 6.1% in January, while core inflation would rise to 5.5% from 5.6%.

This week, some companies such as ASO, ADBE, DG, FDX, FIVE, GTLB and LEN will release their earnings towards the end of the season. Additionally, PFE has agreed to pay $43 billion for SGEN’s biotech business causing a 15% increase in SGEN’s stock while PFE shares rose only 0.3%. ILMN saw an early jump of over 11% due to news reports suggesting activist investor Carl Icahn was planning on nominating three people to the company’s board of directors. The Stock Market Today is expected to be active with these developments.

Tesla, the leading electric-vehicle company, saw its shares plummet over 2% on Monday morning following a downgrade from Wolfe Research. Meanwhile, other tech giants in the Dow Jones such as Apple and Microsoft were on the rise after the stock market opened. In light of the new stock market correction, investors should keep an eye out for several top-performing stocks including Palo Alto Networks (PANW) – which features on IBD’s Leaderboard watchlist -, New Relic (NEWR), and Salesforce (CRM). It’s worth noting that Palo Alto is also an IBD Leaderboard watchlist stock while New Relic was recently featured as an IBD Stock Of The Day. Additionally, Salesforce garnered attention last week when it appeared among “Stocks Near A Bu”.

Oil Prices and Treasury Yields on the Dow Jones Today

As of Monday morning’s market opening, the Dow Jones Industrial Average had gained 0.15 percent and the S&P 500 had declined by 0.1%. The tech-heavy Nasdaq composite gained 0.4% in morning action, led by Seagen and Illumina. The Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.4% early Monday, while the SPDR S&P 500 ETF (SPY) fell 0.1%.

After the collapse of the SVB, the 10-year yield fell to 3.69% on Friday, and then fell to 3.47% on Monday as safe haven trade drove bonds higher. The dollar angled lower, losing ground against the euro and yen.

Following Friday’s brief bounce, oil prices fell Monday morning. In early trade, West Texas Intermediate futures fell nearly 5%, trading below $73 a barrel. Gold and silver also moved sharply higher as investors sought solid ground. Gold gained 1.4%, crossing $1,892 an ounce. Silver gained 3.3%, passing $21 an ounce.

Correction in the stock market

The stock market took a notable plunge on Friday, resulting in significant losses for major indices. The Dow Jones Industrial Average experienced a drop of 1.1%, while the S&P 500 declined by 1.45% and the Nasdaq fell by 1.8%. In light of this situation, IBD’s Big Picture column indicated that their previous “uptrend under pressure” outlook was no longer appropriate since it has now shifted to a “market in correction.” Given these circumstances, investors are advised to adopt defensive trading strategies such as taking profits or cutting losses short, rather than making any new purchases of stocks.

It ended Friday at 55% below its 52-week high and snapped a four-day losing streak Friday with modest gains. Tesla shares fell 2% Monday morning, threatening to erase the gains of Friday.

The Dow Jones stock Apple shares fell 1.4% Friday, ending a weeklong loss of 1.7%. The stock rose 1.6% early Monday. Microsoft shares extended a losing streak to four sessions with a 1.5% fall Friday. After recent declines, the stock is nearly 20% below its 52-week high. MSFT stock rose 0.8% Monday morning.

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