Stocks up after bank deal, regulator moves

NEW YORK — Stocks rose on Wall Street Monday after regulators pushed together two huge banks over the weekend and made other moves to build confidence in the struggling industry.

The S&P 500 climbed 34.93 points, or 0.9 percent, to 3,951.57.

The Dow Jones Industrial Average gained 382.60, or 1.2 percent, to 32,244.58, and the Nasdaq composite added 45.02, or 0.4 percent, to 11,675.54.

Much attention has been on banks because they may be cracking under the pressure of much higher interest rates.

Swiss banking giant UBS said Sunday it would buy its troubled rival Credit Suisse for almost $3.25 billion in a deal quickly put together by regulators.

A group of central banks stretching from the United States to Japan also announced coordinated moves on Sunday meant to ease strains in the financial system.

They should allow banks more access to U.S. dollars if needed.

The moves don’t mean the banking industry’s crisis is over, but “it’s taken one of the troublesome aspects off the table,” said Ryan Detrick, a strategist at Carson Group.

The late Sunday announcements by regulators may be reminiscent of the 2007-08 financial crisis that wrecked the global economy, but many investors see big differences between then and now.

“The market is trying to digest: Is this just a few bad financial companies that have really made some bad decisions, or is the whole thing a house of cards?” Detrick said. “We’re optimistic that it’s multiple banks in a bad situation but not the entire system.”

In the U.S., most of the attention has been on smaller and midsized banks on fears that falling trust could push their depositors to pull their money all at once.

That’s what’s called a bank run, and such a drastic move could topple them.

First Republic Bank has been at the center of investors’ cross hairs in the hunt for the industry’s next victim following the second- and third-largest U.S. bank failures in history. Its shares fell 47.1 oercent after S&P Global Ratings cut its credit rating for a second time since Wednesday.

S&P said it could lower the rating even further despite a group of the biggest U.S. banks announcing last week they would deposit $30 billion in a sign of faith in First Republic and the larger banking industry.

Stocks of other smaller-and mid-sized banks, meanwhile, were much stronger.

The Federal Reserve board will announce its latest move on interest rates Wednesday..