US stocks close higher as First Republic recoups some losses

U.S. economy

IN NEW YORK: Although regional banking stocks increased and the troubled First Republic Bank somewhat recovered its earlier-this-week losses, US markets ended the day higher on Tuesday.
The Dow Jones Industrial Average closed 1.0 percent higher at 32,560.60 while the broad-based S&P 500 increased 1.3 percent to 4,002.87.
The tech-heavy Nasdaq Composite Index, meanwhile, increased 1.6 percent to end the day at 11,860.11.
According to Steve Sosnick, chief strategist at Interactive Brokers, “We haven’t heard of any new banks this week” having problems. That is encouraging for markets.

According to him, the steep decrease of the VIX index, which tracks market volatility, indicates that markets have somewhat stabilised.
The Florida-based Seacoast Banking Corporation gained on previous advances to end the day up 4.6 percent, joining First Republic in posting daily gains of nearly 30 percent.

KeyCorp, a different local bank, finished the day up 9.3%.

A day before the US Federal Reserve makes a major interest-rate decision, equities on Wall Street are rallying. The Fed is aiming to strike a compromise between high inflation and lingering worries about the banking industry in the wake of Silicon Valley Bank’s spectacular drop.