(CercleFinance.com) – The New York Stock Exchange continued its upward trajectory on Tuesday with a few cheap buyouts and thanks to reassuring remarks from Janet Yellen, the US Treasury Secretary.
At the very end of the morning, the Dow Jones advanced 0.6% to 32,432.9 points, while the Nasdaq Composite rose 0.7% to 11,756.5 points, extending their recovery from the day before.
At the American Bankers Association summit in Washington, Janet Yellen said the Biden administration would do everything possible to protect the American financial system.
Last week, the Treasury had already teamed up with the Federal Reserve and the Federal Banking Deposit Insurance Authority (FDIC) to guarantee deposits for customers of Silicon Valley Bank and Signature Bank.
“Similar measures could be justified if smaller establishments were to suffer from a wave of deposit withdrawals likely to pose a risk of contagion,” she assured today.
In the wake of those comments, the financial sector rose 2.3% after dropping more than 14% over the past month, the worst sector performance of the S&P 500 index.
With a gain of 24%, the title of the Californian bank in difficulty First Republic Bank signs the strongest rise in the S&P 500 index, followed by other financial stocks such as Raymond James (+ 4.4%) or US Bancorp (+4%).
Another supporting factor, investors seem to have appreciated the figure for sales of existing homes, which rebounded strongly in February after 12 consecutive months of decline, hinting at a recovery trend in the real estate market.
‘Buyers rushed to buy before borrowing rates rose too much’, explains an analyst.
However, investors are avoiding taking too strong positions on the eve of the Federal Reserve’s announcements, which should lead to a rate hike of 25 basis points.
In the bond market, the yield on 10-year Treasury bills rose above 3.57% after their drop last week which had taken it to lows of almost six months.
Copyright (c) 2023 CercleFinance.com. All rights reserved.