US Stocks Rise, Recover Most Losses    03/23 13:04

   Stocks are rallying Thursday to recover almost all of their steep loss from 
a day before, when markets tumbled into the close.

   NEW YORK (AP) -- Stocks are rallying Thursday to recover almost all of their 
steep loss from a day before, when markets tumbled into the close.

   The S&P 500 was 1.5% higher in midday trading. The Dow Jones Industrial 
Average was up 393 points, or 1.2%, at 32,423, as of noon Eastern time, while 
the Nasdaq composite was 2.1% higher.

   A day earlier, stocks fell sharply after the Federal Reserve indicated that 
while the end may be near for its market-rattling hikes to interest rates, it 
still doesn't expect to cut rates this year. Markets lost momentum after Fed 
Chair Jerome Powell said that, along with an insistence that it could keep 
raising rates if inflation stays high.

   But traders on Thursday were still largely betting the Fed will cut rates 
later this year. Such cuts can act like steroids for markets, juicing prices 
for stocks, bonds and other investments. They would relax the pressure on the 
economy, but they could also give inflation more fuel.

   Big technology and other high-growth stocks that tend to benefit the most 
from lower rates were leading the way on Wall Street. Nvidia rose 3.4%, 
Microsoft gained 3% and Apple climbed 1.8%.

   Some analysts were also saying comments from Treasury Secretary Janet Yellen 
that may have dragged down bank stocks on Tuesday weren't much different from 
what she's said before.

   She said the government is not considering blanket protections for all 
customers at all banks, something that could have prevented the kinds of runs 
on banks that have already toppled two in the couple weeks. That may have 
disappointed some investors hoping for a more comprehensive solution. But 
Yellen did say the government will make all depositors whole at banks on a 
case-by-case basis, when failing to do so would mean risk for the broader 
system.

   "However, in testimony last week, she hinted that all banks will be 
considered systemically important, so that uninsured deposits would be covered 
if a relatively small bank fails in the days ahead," Mark Haefele, chief 
investment officer at UBS Global Wealth Management, wrote in a report.

   Each of the last two big bank failures this month met such a "systemic risk 
exception." Depositors were promised all their money, even those with more than 
the $250,000 limit insured by the Federal Deposit Insurance Corp.

   Most stocks in the financial industry were up after falling a day before. 
But First Republic Bank, which has been at the center of investors' crosshairs 
the last couple weeks because of the industry's crisis, was yo-yoing. It was 
recently down 4.9% after rising nearly 10% in the morning.

   The second- and third-largest U.S. bank failures in history occurred earlier 
this month after customers at Silicon Valley Bank and Signature Bank rushed to 
pull out money all at once.

   One factor hurting banks is how much the Fed has raised interest rates over 
the last year. Rate hikes are meant to get inflation under control, but they're 
a very blunt tool that slows the entire economy.

   That raises the risk of a recession later on, and it also drags down prices 
for stocks, bonds and other investments. For Silicon Valley Bank and others, it 
meant losses for the bond investments they had made, even in things like 
super-safe Treasury bonds.

   The fear is that all the turmoil in the banking industry could cause a sharp 
pullback in lending to small and midsized businesses around the country. That 
could put more pressure on the economy, raising the risk for a recession that 
many economists already saw as likely.

   The Fed's Powell said such fears were part of the reason the central bank 
raised rates by only a quarter of a percentage point Wednesday instead of more. 
A pullback in lending could act almost like a rate hike on its own, he said.

   The Fed has raised its key overnight rate to a range of 4.75% to 5%, up from 
virtually zero at the start of last year. Its policy makers indicated they 
might raise rates one more time this year before holding steady through the end 
of this year.

   In markets abroad, stocks in London slipped 0.6% after the Bank of England 
also raised its key rate by a quarter of a percentage point. Stocks were mixed 
elsewhere across Europe and Asia.

   On Wall Street, shares of Coinbase Global fell 11.7% after the 
cryptocurrency trading platform said it had been warned by the U.S. Securities 
and Exchange Commission that it could face charges of violating federal 
securities laws.

   In the U.S. bond market, which has been home to some of Wall Street's 
wildest moves this month, yields were mixed.

   The yield on the two-year Treasury dropped to 3.90% from 3.97% late 
Wednesday. It was above 5% earlier this month.