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TOKYO, May 1 (AP) — The traditional Labor Day holiday around the world may have limited the market’s initial reaction to U.S. regulators delaying an expected decision on how to deal with troubled First Republic Bank.
San Francisco-based First Republic has been struggling since the collapse of Silicon Valley Bank and Signature Bank in early March, as investors and depositors worried that the bank might not last much longer as a separate entity.
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First Republic is seen as the most likely next bank to fail due to its large number of uninsured deposits and low interest rate risk. The regulator is thought to be looking to sell all or some of the banks before markets reopen for trading on Monday.
The bank’s shares closed at $3.51 on Friday, a tiny fraction of where they were trading at around $170 a year ago.
Stephen Innes of SPI Asset Management said in a commentary: “A quiet Monday opened with a feeling of holiday, no news from the First Republic Front is good news.”
In Asian trading on Monday, Tokyo’s Nikkei 225 rose 0.7% to 29,056.25, while Sydney’s S&P/ASX 200 rose 0.6% to 7,352.20. Other markets in the area are closed.
On Friday, the S&P 500 rose 0.8% to 4,169.48. It still won for the second month in a row despite some wild swings this week. The Dow Jones Industrial Average rose 0.8 percent to 34,098.16 and the Nasdaq Composite added 0.7 percent to 12,226.58.
Shares of ExxonMobil rose sharply after shares rose 1.3%. It reported stronger-than-expected profit and revenue for its latest quarter.
Intel shares rose 4 percent after the company reported a smaller-than-expected loss and strong revenue in its latest quarter. Mondelez International , the food giant behind Oreo and Ritz , rose 3.9 percent after beating Wall Street expectations. It also raised its forecast for full-year revenue and earnings.
They helped offset a 4% drop in Amazon, which weighed heavily on the market even as the company reported stronger-than-expected profit and revenue for its latest quarter. Analysts pointed to slower revenue growth in its AWS cloud computing business.
The economy is slowing under the pressure of higher interest rates aimed at keeping inflation in check. While most companies have beaten expectations so far this reporting season, they are set lower given forecasts of a possible recession.
Based on recent economic reports, traders are betting that the Federal Reserve will raise interest rates again at its meeting next week, and possibly in June.
A report on Friday said the inflation measure the Fed prefers to use was closer to expectations in March but well above target. In addition, wages rose more than economists expected in the first three months of the year, potentially making inflation more entrenched.
The Fed has raised its key overnight interest rate from a record low to the highest level since 2007, following a string of rate hikes since early last year. They had already slowed economic growth to an estimated 1.1% annual rate earlier this year.
They also lead to cracks in the banking system.
The Federal Reserve released a report on Friday blaming SVB’s failure on bank mismanagement, weak regulation and lax government oversight.
In other trading on Monday, U.S. benchmark crude fell 63 cents to $76.15 a barrel in electronic trading on the New York Mercantile Exchange. It rose $2.02 on Friday.
Brent crude, the benchmark for international trading, fell 61 cents to $79.72 a barrel.
The dollar rose to 136.75 yen from 136.24 yen. The euro fell to $1.1006 from $1.0023. (Associated Press)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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