Highlights
A rebound in bank stocks and in cyclicals lifted equities Monday while US Treasury yields bounced back as the flight to safety reversed a bit. The Dow Jones industrial average rose 1.2 percent, the S&P 500 gained 0.9 percent, and the NASDAQ firmed 0.4 percent. US Treasury yields jumped, with the short end up the most, and oil prices rose while the dollar was mostly weaker.
Risk appetite got a boost from news that Swiss authorities had imposed a merger of ailing Credit Suisse and UBS to end the uncertainty around Credit Suisse. News that major central banks had stepped up dollar swap facilities was seen as another reassuring step.
Bank stocks bounced back Monday but the situation remained dicey with many banks ending well down from early highs. First Republic fell steeply again. Other beleaguered banks, including PacWest Bancorp and New York Community Bancorp managed big gains.
Switching out of growth -- and megacaps in particular after their recent outperformance -- fueled a rally in cyclicals. Among sectors, best were energy, materials, financials, and industrials, plus health care and consumer staples. Chipmakers were notable winners, paced by Nvidia. Among cyclicals, Honeywell, Caterpillar, and Dow were among the best performers.
Risk appetite got a boost from news that Swiss authorities had imposed a merger of ailing Credit Suisse and UBS to end the uncertainty around Credit Suisse. News that major central banks had stepped up dollar swap facilities was seen as another reassuring step.
Bank stocks bounced back Monday but the situation remained dicey with many banks ending well down from early highs. First Republic fell steeply again. Other beleaguered banks, including PacWest Bancorp and New York Community Bancorp managed big gains.
Switching out of growth -- and megacaps in particular after their recent outperformance -- fueled a rally in cyclicals. Among sectors, best were energy, materials, financials, and industrials, plus health care and consumer staples. Chipmakers were notable winners, paced by Nvidia. Among cyclicals, Honeywell, Caterpillar, and Dow were among the best performers.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
