[New York Stock Market] First Republic Falls 30%, Mixed Close... Nasdaq Up 0.47%

The three major indices of the U.S. New York stock market closed mixed on the 26th (local time) amid the crash of First Republic Bank and the earnings announcements of major companies. The stock price of First Republic, which had plummeted nearly 50% the previous day, reigniting concerns about a banking sector crisis, continued its double-digit decline close to 30% on this day as well.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,301.87, down 228.96 points (0.68%) from the previous session. The S&P 500 index, centered on large-cap stocks, recorded 4,055.99, down 15.64 points (0.38%). In contrast, the tech-heavy Nasdaq index closed up 55.19 points (0.47%) at 11,854.35.

[Image source=Reuters Yonhap News]

Investors are closely watching the flood of major corporate earnings and economic indicators this week. Following Microsoft (MS) and Alphabet’s better-than-expected first-quarter results announced the previous day, Boeing, Chipotle Mexican Grill, and others released earnings before the market opened on this day. Boeing’s first-quarter sales rose 27% year-over-year, and its net loss narrowed. Chipotle’s earnings per share came in at $10.5, beating market expectations. After the market close, Meta Platforms, Mattel, and eBay are scheduled to release their earnings. It is estimated that about one-third of the companies listed on the S&P 500 will report earnings this week.

All ten sectors excluding technology stocks in the S&P 500 declined. Microsoft (MS), a leading tech stock that reported better-than-expected earnings after the previous day’s close, rose more than 7% from the previous session. Activision Blizzard fell more than 11% after UK regulators declined to approve MS’s acquisition. Meta Platforms, which announced earnings after the market close on this day, rose 0.89% to finish the regular session. Amazon rose 2.35% amid growing expectations in the cloud market following MS’s earnings announcement. Chipotle Mexican Grill jumped 12.91% on better-than-expected strong results.

First Republic Bank, whose stock price had plunged nearly 50% the previous day, fell another 29.75% on this day. First Republic Bank had earlier been engulfed in crisis rumors following the collapse of Silicon Valley Bank (SVB), and in its recent earnings report, it revealed that deposits fell about 41% in the first quarter, highlighting renewed concerns in the banking sector. Bloomberg News reported that U.S. banking regulators are considering downgrading their assessment of First Republic. Additionally, Tesla fell more than 4% as Jefferies lowered its target price amid concerns about future profitability. Its market capitalization also fell below the $500 billion mark.

Ross Mayfield, investment strategy analyst at Baird, said, "Corporate earnings were not sufficient to drive the stock market higher. While there were good earnings reports among big tech companies, more is needed to act as a market catalyst, especially when other headwinds are pressuring the market." Kelly Cox, an analyst at investment firm Itau, stated, "The information (earnings) companies provide can help alleviate investors’ fears about how U.S. companies are navigating growth slowdowns and rising costs."

The durable goods orders released on this day for March increased by 3.2% compared to the previous month. This marked a return to growth after three months and far exceeded the Dow Jones forecast of 0.5%. CNBC reported that demand for goods such as home appliances and computers increased more than expected, indicating resilience in the U.S. economy. The February figure was revised down to -1.2%. Additionally, the U.S. first-quarter gross domestic product (GDP), scheduled for release later this week, is expected to show growth around 2%.

With the May Federal Open Market Committee (FOMC), which sets the benchmark interest rate, approaching and officials entering a blackout period, the personal consumption expenditures (PCE) price index for March, a preferred inflation gauge of the Federal Reserve, is also scheduled for release later this week. Wall Street experts expect the core PCE to rise 4.5% year-over-year and 0.3% month-over-month. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market currently reflects about a 77% chance that the Fed will implement a baby step (a 0.25 percentage point rate hike) in May.

In the New York bond market on this day, U.S. Treasury yields rose slightly. The 10-year U.S. Treasury yield hovered around 3.43%, and the 2-year yield, sensitive to monetary policy, was around 3.93%. The dollar index, which shows the value of the dollar against the currencies of six major countries, fell more than 0.3% from the previous session to 101.4.

International oil prices fell for the second consecutive trading day due to banking sector concerns and rising inventories. On the New York Mercantile Exchange, the June delivery West Texas Intermediate (WTI) crude oil price closed at $74.30 per barrel, down $2.77 (3.59%) from the previous session.

This content was produced with the assistance of AI translation services.