by Stephen Culp

NEW YORK (Reuters) – The New York Stock Exchange ended higher on Friday as statements by U.S. Federal Reserve (Fed) officials eased investor fears of a liquidity crunch in the banking sector.

The Dow Jones Industrial Average gained 0.41%, or 132.28 points, to 32,237.53 points.

The broader S&P-500 gained 22.63 points, 0.57%, to 3,971.35 points.

The Nasdaq Composite advanced for its part by 36.56 points (0.31%) to 11,823.96 points.

The session concludes a volatile week, marked by the quarter point hike in the main interest rate of the Fed and concerns about the health of the banking system.

“Markets rose as concerns persisted about another surge in the banking sector in the United States or abroad,” said David Carter, managing director of JPMorgan Private Bank in New York.

“Wall Street takes its cues from Washington and other capitals when it comes to interest rates and banking regulations.”

The Fed has decided to raise its key rate by 25 basis points because it believes that the banking system is not facing a liquidity crisis, announced three of the institution’s regional directors.

While Fed officials continue to view further rate hikes as a strong possibility, financial markets are now pricing in the likelihood of no hike at all following the next policy meeting in May.

In stocks, major US banks like PMorgan Chase & Co and Wells Fargo pared their losses late in the session as Bank of America returned to positive territory.

US regional banks PacWest, Western Alliance and Truist Financial Corp also pared losses, though First Republic Bank was still trading in negative territory at the close.

Germany’s largest bank, Deutsche Bank, for its part ended in the red as the yield on its Additional Tier 1 (AT1) debt and the cost of insurance against the risk of payment default (CDS) rose sharply.

Activision Blizzard jumped after the UK competition regulator ruled that Microsoft’s takeover of Activision should not harm competition in the video game console segment.

(With contributions from Amruta Khandekar and Ankika Biswas; Camille Raynaud)

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