NEW YORK, March 27 — Wall Street stocks advanced early today as news of US bank First Citizens’ acquisition of fallen lender Silicon Valley Bank boosted shares in the financial sector.
Shares of North Carolina-based First Citizens surged more than 40 per cent after US regulators announced that it purchased about $72 billion of SVB’s assets at a discount of US$16.5 billion.
About 20 minutes into trading, the Dow Jones Industrial Average was up 0.9 per cent at 32,523.07.
The broad-based S&P 500 gained 0.8 percent to 4,002.88, while the tech-rich Nasdaq Composite Index climbed 0.6 per cent to 11,899.21.
The banking sector has been under scrutiny in the wake of the Federal Deposit Insurance Corporation’s move on March 10 to take control of SVB, which suffered a crushing run on deposits.
The FDIC said the deal with First Citizens covers all deposits and loans but that around US$90 billion in securities and other SVB assets will remain under federal receivership.
Shares of large banks like Bank of America advanced, along with regional lenders such as KeyCorp and First Republic Bank.
“You go into the weekend, during a period of bank drama, concerned that another shoe may drop,” said B. Riley Financial’s Art Hogan, adding that instead, developments with First Citizens were “seen as good news.”
This week’s calendar includes a congressional hearing into the SVB saga, as well as economic reports on consumer confidence and personal consumption pricing. — AFP
