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Investing.com — U.S. stocks are rising on Monday after the weekend’s $3.2 billion tie-up of UBS and Credit Suisse as banking regulators raced to shore up confidence in the system.
At 11:53 ET (15:53 GMT), the Dow Jones Industrial Average was up 342 points or 1.1%, while the S&P 500 rose 0.7% and the NASDAQ Composite rose 0.1%.
Wall Street is wondering how much the turmoil in the banking sector is going to weigh on the economy, and how much the Federal Reserve will factor in the events of the past two weekends when it decides on interest rates this week.
Futures traders are largely expecting the Fed to raise rates by a quarter of a percentage point, while just about 25% of traders are betting on a pause.
UBS Group AG (NYSE:UBS), with the backing of Swiss banking regulators, came to the rescue of its rival in the hope it would stabilize conditions. Shares of Credit Suisse Group (NYSE:CS) sank 54% on Monday, while UBS rose 3.3%.
But investors were still wary about corners of the banking sector. First Republic Bank (NYSE:FRC) shares fell 20% after ratings cut by S&P Global.
The Fed and five other central banks began offering daily instead of weekly currency swaps starting today and going through April to ease concerns about the flow of dollars available in the system.
In addition to the Fed decision, the policymakers will release their latest dot-plot projections on aspects of the economy on Wednesday, including their outlook for unemployment and economic output.
This week also brings economic data on existing home sales and jobless claims.
Shares of Bed Bath & Beyond Inc. (NASDAQ:BBBY) fell 17% after saying it would seek shareholder approval for a reverse stock split.
