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The Dow Jones Industrial Average dropped on Monday as a Federal Reserve plan to backstop all the depositors in failed Silicon Valley Bank, along with other extraordinary measures, failed to boost bank shares.
The 30-stock index surrendered 90.5 points to 31,819.14, making five straight days of losses.
The S&P 500 lost 5.83 points to 3,855.70.
The NASDAQ Composite broke the trend and gained 49.96 points to 11,188.94.
A joint statement from the Fed, Treasury Department and the Federal Deposit Insurance Corporation said all Silicon Valley Bank depositors would have access to their money starting Monday. The Fed also said it is creating a new Bank Term Funding Program aimed at safeguarding deposits. The facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions.
Bank stocks remained under pressure following last week’s slide, with JPMorgan Chase and Citigroup falling. Regional banks fell even more, led by a drop of more than 61% in First Republic.
But investors bought up other areas of the market outside of banks, such as some technology stocks like Apple and defensive names including Johnson & Johnson and Eli Lilly
All Silicon Valley Bank depositors will have access to their money starting Monday, according to a joint statement from the Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation.
The Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding deposits. The facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions.
President Joe Biden said shortly before the market opened on Monday that Americans can trust the U.S. banking system.
Elsewhere, investors are watching various economic reports this week. Tuesday’s consumer price index report is the last major inflation data release ahead of the Fed’s next meeting, ending March 22. February retail sales and the producer price index are also on deck.
Prices for the 10-year Treasury rose sharply, lowering yields to 3.55% from Friday’s 3.69%. Treasury prices and yields move in opposite directions.
Oil prices erased $2.20 to $74.48 U.S. a barrel.
Gold prices hiked $50.50 to $1,917.70 U.S. an ounce.
