Shares of industrial and transportation companies rose as traders rotated back into cyclical sectors, betting that a banking crisis would soon pass.
Trucking line Knight-Swift Transportation Holdings agreed to buy smaller rival U.S. Xpress Enterprises for about $808 million.
Treasury Secretary Janet Yellen's vow to support depositors and a reported effort by JPMorgan Chase to raise capital for First Republic Bank restored confidence in the banking sector. Strategists warned that the banking crisis likely foreshadowed more issues with financial conditions and economic growth, however.
"Historically, when you have these blowups they typically are not isolated, especially in an environment where rates have moved up very quickly," said Quincy Krosby, chief global strategist at brokerage LPL Financial. "This is where the focus is, in trying to determine whether or not this is completely isolated, completely contained."
Another strategist said the drying up of liquidity in the banking system would have an economic impact. "Lending standards are already at levels coincident with recession in the past," said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. "This will certainly only tighten the spigot further. As you think about liquidity drying up in the economy, cracks begin to show."
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
03-21-23 1734ET
