4:15pm: Gold rally takes a breather
US stocks finished the day in positive territory as regional banks rebounded on the news UBS would be buying troubled Swiss lender Credit Suisse.
At the close, the Dow Jones had added 1.2% at 32,245 points, the S&P 500 was up 0.9% at 3,952 points, and the Nasdaq Composite was up 0.4% at 11,675 points.
After breaking $2,000 earlier in the day, gold finished the session at about $1,983.
12:05pm: Swiss government pressures UBS to buy Credit Suisse
US stocks were mixed in noon trading after a Swiss government-engineered takeover of troubled Credit Suisse by UBS lifted shares of the US regional banks.
At midday, the Dow gained 310 points to 32,172, while the S&P 500 added 23 points at 3,940 and the tech-heavy Nasdaq slipped 4 points to 11,627.
“I think there’s a pendulum that swings too far each way,” KKM Financial CEO Jeff Kilburg said.
“Last week, there was a punishment and a range of emotion — really exaggerated — the selling as well as the buying,” he added.
Notable movers included shares of Starbucks Corporation, which rose nearly 2% after the company has handed the reins of the world’s largest coffee chain to its incoming chief executive officer Laxman Narasimhan nearly two weeks earlier than planned.
9:43am: Credit Suisse shares swoon after UBS takeover
Shortly after the opening bell, the Dow was up 189 points, 0.6%, to 32,051, the Nasdaq Composite lost 41 points, 0.4%, to 11,590 and the S&P 500 improved 5 points, 0.1%, to 3,922.
Investors are hopeful that UBS' $3.2 billion dollar deal to buy flailing bank Credit Suisse, made possible in part by Swiss regulators, will shore up the ongoing banking crisis in the US.
The deal hasn't helped Credit Suisse's own shares, which are down nearly 50% to $1.03 in New York.
"Credit Suisse liquidity has become a major threat to the health of the overall banking sector in recent months," TickMill Group’s market analyst James Harte wrote. "The recent market turmoil around the collapse of SVB saw Credit Suisse shares plummeting to fresh lows, stoking fears of an imminent collapse."
There is also optimism that the banking sector's woes will keep the Federal Open Market Committee from raising rates when it meets later this week.
7:35am: Market volatility continues
Wall Street is expected to open flat on Monday as investors bet the Federal Open Market Committee will err on the side of caution when it meets later this week, opting for a 25 basis point interest rate hike rather than the 50 previously expected, due to ongoing turmoil in the banking sector.
Futures for the Dow Jones Industrial Average (DJIA) declined less than 0.1% in pre-market trading, while those for the broader S&P 500 index added less than 0.1%, and contracts for the Nasdaq-100 were up by the same margin.
US stocks finished in the red on Friday in a volatile week for global markets, even after a consortium of 11 banks joined forces to deposit $30 billion into regional bank First Republic to help stem further contagion in the sector a week after Silicon Valley Bank went under. The DJIA shed 1.2% to 31,862 points, the S&P 500 fell 1.1% to 3,917 points, and the Nasdaq Composite lost 0.7% to 11,630 points.
In the latest development in the banking sector, UBS Group will take over its embattled Swiss rival Credit Suisse for $3.25 billion following crunch talks on Sunday aimed at stopping the stricken bank from triggering a wider international banking crisis.
“While the market's main focus remains the turmoil in the banking sector, investors will have one eye on central bank activity this week as officials face the conundrum of balancing inflationary concerns with recent market volatility pressures and the likely implications for economic activity and the appropriate response for monetary policy,” commented TickMill Group market analyst Patrick Munnelly.
“Just over a week ago markets were aggressively pricing the potential that the Fed would use this week’s policy update to signal a re-acceleration in the pace of interest rate increases by hiking by 50 basis points (bps) rather than repeating the 25bps rise seen in February, with further indications of the potential for a higher terminal rate for this policy tightening cycle.
"However, given recent market turbulence, investors are now pricing a 25bps hike with the potential for significant rate cuts by year-end, which marks a stark reversal in market sentiment," he added.