The Dow Jones Industrial Average rose to a new record on Monday despite weakness in bank stocks caught in the downdraft of Friday’s margin call.
The Dow erased a 160-point loss and closed up 98 points at a fresh record of 33,171. The S&P 500 fell 0.09% to 3,971 after falling as much as 0.8% earlier. The Nasdaq Composite slipped 0.6% to 13,059.
Credit Suisse shares tumbled 11.5% as the bank warned it would face a “significant” hit to its first-quarter results due to the bank having to exit hedge fund positions related to the forced selling. Nomura also warned that it could get hit, sending its shares down 14%.
Bank stocks weighed on the Dow industrials, with Morgan Stanley dropping 2.6% and JPMorgan Chase off 1.6%. The weakness came as government bond yields edged higher to start the week.
Traders are bracing for heightened volatility during this holiday-shortened week with quarter-end rebalancing among pension funds and other big investors. The recent swift advance in bond yields could set up money managers for big adjustments in their portfolios.
Investors are awaiting updates from President Joe Biden about his infrastructure plan which could cost north of $3 trillion. The president is expected to unveil his plan when he travels to Pittsburgh on Wednesday and also detail how it would be paid for. White House press secretary Jen Psaki said Sunday Biden plans to roll out two packages in the coming months, the first covering infrastructure and the second covering health and family care.
The stock market is closed for the Good Friday holiday, but the March jobs report is still slated for release that morning. Economists expect 630,000 jobs were added in March, and the unemployment rate fell to 6% from 6.2%, according to Dow Jones.
Reference: CNBC
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