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S&P 500 Ends Volatile Week with Weekly Gains Despite Banking Sector Worries

By:
James Hyerczyk
Updated: Mar 27, 2023, 01:33 GMT+00:00

S&P 500 rebounds after volatile session, all major indexes end week higher.

S&P 500 Index, Dow Jones Industrial Average and NASDAQ Composite

In this article:

Key Takeaways

  • Stock market rebounds after Deutsche Bank scare
  • Deutsche Bank rebounds from earlier selloff to close 3.11% lower
  • Fed officials calm investor fears over potential liquidity crisis
  • Nine of the 11 major sectors in the S&P 500 gain, with utilities and real estate sectors leading

Overview

On Friday, the major U.S. stock indices, led by the benchmark S&P 500 Index, experienced a volatile trading session due to fears that the banking crisis was spreading to Deutsche Bank, resulting in a sell-off of its U.S.-listed shares in the morning. However, markets rebounded, resulting in a winning week for all major indexes.

The Dow Jones Industrial Average gained 0.41%, closing at 32,237.53, while the S&P 500 and Nasdaq Composite rose 0.56% and 0.30%, respectively.

Daily S&P 500 Index

Regional Bank Stocks Bounce Back, Deutsche Bank Rebounds from Earlier Sell-Off

A bounce-back in regional bank stocks helped the market, with the SPDR S&P Regional Banking ETF gaining 3.01%.

Deutsche Bank’s earlier selloff was triggered by the sudden jump in its credit default swaps, but it rebounded later in the day to close 3.11% lower.

European Central Bank President Christine Lagarde tried to ease concerns over the health of the European banking industry by stating that euro zone banks are resilient with strong capital and liquidity positions.

Sanders Morris Harris President George Ball remarked that the market was confused and lacked direction, with no fundamental reason for Deutsche Bank’s earlier selloff other than nervousness. Ball added that the bank was financially sound and that it could be crippled only if there was a significant loss of confidence that led to a run on the bank.

Fed Officials Ease Investor Worries Amid Liquidity Crisis Fear

Federal Reserve officials helped calm investor fears over a potential liquidity crisis in the banking sector.

While Fed officials continue to see additional rate hikes as a strong possibility, financial markets are now favoring the likelihood of no hike at all at the conclusion of its next policy meeting in May.

KBW Regional Bank Index Gains 2.9% While S&P Bank Index Falls Modestly, Utilities and Real Estate Sectors Lead Gains in the S&P 500

While the S&P Bank index ended modestly lower, the KBW Regional Bank index jumped 2.9%.

Nine of the 11 major sectors in the S&P 500, with defensive sectors such as utilities and real estate enjoying the biggest percentage gains.

Consumer discretionary and financials were the two losers.

Advancing issues outnumbered declining ones on the NYSE by a 1.47-to-1 ratio; on NASDAQ, a 1.26-to-1 ratio favored advancers.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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