(Reuters) – The New York Stock Exchange struggled to find a clear trend in early trading on Monday as authorities’ moves to contain contagion risk following the collapse of Silicon Valley Bank (SVB) were not enough to fully reassure investors. investors, who are still abandoning banking stocks.

Around 2:15 p.m. GMT, the Dow Jones index lost 0.12%, to 31,871.14 points, after losing up to 0.9% and then briefly returning to green.

The wider Standard & Poor’s 500 fell 0.2% to 3,855.98 points.

The Nasdaq Composite lost 0.15% to 11,125.75 points.

The troubles of SVB Financial Group, which collapsed on the stock market last week after a capital increase intended to make up for a loss following the sale of a bond portfolio, raised concerns about the risks faced by other banks during the Fed’s steepest rate hike cycle since the early 1980s.

Caught in the vice by the rise in interest rates, the SVB was closed Friday by the Californian authorities, who announced that customers could withdraw their deposits as of Monday.

SVB’s misfortunes have put the banking sector under pressure since then, with a second bank, Signature Bank, particularly exposed to cryptocurrencies, closed by the American regulator this weekend.

President Joe Biden said on Monday that the steps taken by the administration to help depositors at two U.S. banks should provide reassurance about the safety of the banking system.

In order to counter the threat of a withdrawal of customer deposits, the Federal Reserve has committed to making funds available to banks, via a new bank financing program, for institutions that need it.

“When such an important step is taken so quickly, the first thing you think is that the crisis has been averted. But then you wonder how big this crisis was, how big the risks were for let this action be taken,” said Rick Meckler, partner at Cherry Lane Investments.

Short-term US bond yields, the most sensitive to changes in the path of rates, fell sharply on Monday as the SVB collapse paved the way for a possible lull in central bank monetary tightening.

The yield on two-year US Treasuries plunged 54 basis points to 4.043%, a far cry from its peak of 5.08% hit last week.

Goldman Sachs analysts on Sunday said they no longer expect a rate hike from the US Federal Reserve (Fed) this month in light of tensions in the banking system.

In values, First Republic Bank fell 65.1% due to concerns about the risk for regional banks following the bankruptcy of SVB.

JP Morgan, PNC Financial Service Group, Apollo and Morgan Stanley fell 1.7%, 8.4%, 6.7% and 3.1% respectively.

In other corporate news, Seagen climbed 15% after Pfizer on Monday announced it was buying the company for $43 billion.

Qualtrics, which said a consortium of investors led by Silver Lake and the Canada Pension Plan Investment Board (CPPIB) would acquire it, gained 6.2%.

(Written by Diana Mandiá, edited by Blandine Hénault)

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