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S&P 500 ends a hair lower; hedge fund default concerns hit banks

Stock MarketsMar 29, 2021 04:50PM ET
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2/2 © Reuters. FILE PHOTO: People are seen on Wall St. outside the NYSE in New York 2/2

By Caroline Valetkevitch

NEW YORK (Reuters) - The S&P 500 ended just slightly in the red on Monday, with bank shares falling amid warnings of potential losses from a hedge fund's default on margin calls, while optimism over the economy limited the day's declines.

The Dow ended higher, with shares of planemaker Boeing (NYSE:BA) Co rising 2.3% after the company reached a deal with U.S. budget carrier Southwest Airlines (NYSE:LUV) Co for a variant of the 737 MAX aircraft.

Nomura and Credit Suisse (SIX:CSGN) are facing billions of dollars in losses after a U.S. hedge fund, named by sources as Archegos Capital, defaulted on margin calls, putting investors on edge about who else might have been caught out.

Shares of big U.S. banks and even regional banks fell on the news. The KBW Nasdaq Bank stock index ended 2.3% lower after falling nearly 3.5% during the session.

"There's still chatter as to whether or not, and which, American banks may be affected. That is a question that's lurking. But so far the market has taken (the news) in stride essentially," said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:PRU) in Newark, New Jersey.

Indexes ended off their lowest levels of the day. Optimism about speedy vaccinations and record stimulus, which drove the Dow and the S&P 500 to record closing highs last week, helped keep a floor in the market along with upbeat estimates for upcoming earnings, she said.

The Dow Jones Industrial Average rose 98.49 points, or 0.3%, to 33,171.37, the S&P 500 lost 3.45 points, or 0.09%, to 3,971.09 and the Nasdaq Composite dropped 79.08 points, or 0.6%, to 13,059.65.

Discovery (NASDAQ:DISCA) Inc, ViacomCBS (NASDAQ:VIAC), U.S.-listed shares of Baidu (NASDAQ:BIDU) and VIPShop, all linked to Archegos, fell, extending recent losses.

The Nasdaq was on track to post its first monthly decline in five months.

Investors may also be adjusting their holdings for quarter-end "window dressing," Krosby said.

Volume on U.S. exchanges was 11.02 billion shares, compared with the 13.6 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.93-to-1 ratio; on Nasdaq, a 3.12-to-1 ratio favored decliners.

The S&P 500 posted 71 new 52-week highs and no new lows; the Nasdaq Composite recorded 88 new highs and 54 new lows.

S&P 500 ends a hair lower; hedge fund default concerns hit banks
 

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Comments (13)
TL Chan
TL Chan Mar 29, 2021 6:53PM ET
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no more value stocks
Cal Lowe
Cal Lowe Mar 29, 2021 1:39PM ET
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What nonsense?! Dow is flying to the damn moon now
Pablo Blanc
Pablo Blanc Mar 29, 2021 1:26PM ET
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Reposted this like 5 times already
perplexed76 .
perplexed76 . Mar 29, 2021 1:18PM ET
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banksretrs are looking forward for infrastructure thrillions
AAA BBB
AAA BBB Mar 29, 2021 12:39PM ET
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GME
Roger Miller
Roger Miller Mar 29, 2021 12:27PM ET
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Is that what Powell intended when he gave the big banks easy money to support the economy and create jobs?
Mart Bab
Rubberduck1973 Mar 29, 2021 12:27PM ET
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Good point
Calvin Sky
Calvin Sky Mar 29, 2021 12:13PM ET
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this is just the beginging. you will be burn hedgies
Casino Crypt
CasinoCrypt Mar 29, 2021 11:50AM ET
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The fire was beyond the tree line . It took 10 years to advance up to the house. Now the roof is getting hot but the Fed will install some more fire hoses around the property.
Pupi Pi
Pupi Pi Mar 29, 2021 11:48AM ET
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More hedge funds will follow in descent and disappearance. Simply because they have been greedy and manipulative, heavily shorting stocks without proper risk assessment.
Warren Hunt
Warren Hunt Mar 29, 2021 11:43AM ET
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Now what stocks could those be, maybe it's apple and google
 
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