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(Reuters) – The New York Stock Exchange ended unchanged on Monday as investors awaited the U.S. Federal Reserve’s monetary policy decision later this week and after the collapse of a third state bank United in two months.
The Dow Jones index fell 0.14%, or -46.46 points, to 34,051.70 points. The broader Standard & Poor’s 500 lost 1.61 points, or 0.04% to 4,167.87 points. The Nasdaq Composite fell 13.99 points (0.11%) to 12,212.598.
US regulators announced on Monday that they have seized regional bank First Republic Bank and reached an agreement to sell its assets to JPMorgan.
The KBW regional banking index fell sharply after the bailout announcement while JPMorgan shares rose 2.1% to $141.2.
Investors are indeed wondering about the health of the banking system with this third bankruptcy of a banking establishment in the United States.
“Hopefully the banking crisis is over, but other issues could arise at some point,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
Market observers also digested the latest economic news and in particular, the announcement from the Institute for Supply Management (ISM) which reported on Monday that a manufacturing PMI index was up last month compared to March.
The Fed, which raised rates to curb inflation, is expected to hike another 25 basis points on Wednesday.
Elsewhere, energy stocks fell along with crude oil prices.
However, recent earnings provide some optimism to investors, said Tim Ghriskey. First-quarter results for S&P 500 companies mostly beat expectations, easing concerns.
“We had good results compared to expectations. Analysts have so far given up on revising their estimates downwards,” he explained. “If rates stay at this level and US companies continue to deliver results, that’s very positive.”
Recent strong results from Alphabet, Microsoft and Meta Platforms helped the benchmark S&P 500 index post its second consecutive month of gains on Friday.
(Written by Caroline Valetkevitch, with contributions from Ankika Biswas and Sruthi Shankar in Bangalore; Kate Entringer)
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