US markets close slightly up despite Deutsche Bank woes
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Traders on the floor of the New York Stock Exchange. Market sentiment has improved in the US after recent turmoil in the financial sector.
PHOTO: REUTERS
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NEW YORK – US stocks shook off gloomy banking news from across the Atlantic to end the day slightly higher on Friday, as market sentiment improved after recent turmoil in the financial sector.
“The market is just digesting a very volatile week,” said 50 Park Investments chief executive Adam Sarhan.
“The lack of more bad news is considered good news,” he added.
The Dow Jones Industrial Average closed 0.4 per cent higher at 32,237.53, while the broad-based S&P 500 ended the day up 0.6 per cent at 3,970.99.
The Nasdaq rose 0.3 per cent on Friday to finish the week at 11,823.96.
Shares in German lender Deutsche Bank ended the day 3.1 per cent lower in New York and fell 8.5 per cent in Europe.
This came after the cost of insuring against its likelihood of default spiked to a four-year high amid concerns about the health of some European banks.
United States regional bank stocks, including KeyCorp and PacWest Bancorp, saw modest gains, although the embattled First Republic Bank ended the day down by another 1.4 per cent.
The VIX index, which is often used to gauge the level of market volatility, ended the day down around 3 per cent, suggesting a decline in some perception of the risks facing financial markets.
On Friday, US Treasury Secretary Janet Yellen chaired a meeting of financial regulators as fears of a widening banking sector crisis continued.
The Financial Stability Oversight Council (FSOC) “discussed current conditions in the banking sector and noted that while some institutions have come under stress, the US banking system remains sound and resilient”, said the Treasury Department in a statement.
The FSOC is chaired by the Treasury Secretary, and its members include the heads of the Federal Reserve and Federal Deposit Insurance Corporation.
“As of right now, the lack of another major bank failing this week is, in and of itself, good news,” Mr Sarhan said.
“There still remain a lot of questions with respect to the banking system, but for now, the market can breathe this sigh of relief,” he added. AFP
