Dow Industrials Climb as Bank Concerns Ebb

After weeks of turmoil in the banking industry, First Citizens’ deal to buy large parts of Silicon Valley Bank lifted shares of U.S. regional banks, a group that has come under intensifying pressure following SVB’s collapse more than two weeks ago.

First Citizens’ stock surged $313.06, or 54%, to $895.61, its largest percentage increase on record, according to Dow Jones Market Data figures going back to October 1986.

Shares of

First Republic Bank

climbed $1.46, or 12%, to $13.82. Other regional lenders advanced as well, with

PacWest Bancorp

up 33 cents, or 3.5%, to $9.88, and

Western Alliance Bancorp

WAL 3.03%

up $1, or 3%, to $34.05.

“It’s a bit of a relief rally after the selloff on Friday. It’s also the last week of the quarter, so I don’t think we’re going to see the same levels of volatility,” said

Michael Hewson,

chief market analyst at CMC Markets.

While there are still concerns about the banking sector, there were no negative headlines over the weekend for the first time in several weeks, he added.

Stocks ended a volatile stretch with all three major indexes notching gains last week, but investors remain skittish about risk assets as they weigh central banks’ fight to tame inflation against instability in the financial system. For March, the S&P 500 and Nasdaq are on course to post modest gains, while the Dow is down less than 1%.

While concerns about the banking crisis have eased, the ripple effects from the financial-system strains could lead banks to keep a tighter leash on lending to households and businesses. The impact of a tighter credit cycle and higher interest rates on consumers could bring the economy another step closer to a recession, according to

Saira Malik,

chief investment officer at Nuveen.

“I do think we will experience a mild recession either later this year or early next year,” Ms. Malik said. She has advised clients to focus on higher-quality assets, including companies with the ability to continue to…