Wall Street near flat ahead of Fed decision; regional banks fall

By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. stocks were little changed Monday afternoon as investors were cautious heading into an expected interest rate hike this week by the Federal Reserve.

Shares of JPMorgan Chase & Co (NYSE:) rose 2.5% after it won a weekend auction of First Republic Bank (NYSE:). JPMorgan will pay the U.S. Federal Deposit Insurance Corp $10.6 billion to take control of most of the regional bank’s assets.

The banks index was up 0.5%, but the KBW regional banking index was down 2.2%.

Investors have been on edge about the banking system’s health following the collapse of two other regional banks in March.

Recent earnings have provided some optimism. First-quarter results from S&P 500 companies have mostly beaten expectations, easing economic concerns.

“We’ve had good earnings relative to expectations. Analysts for now have backed off of lowering estimates,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “If we could have rates at this level … and corporate America continue to deliver, it’s very positive.”

The Fed, which has been raising rates to cool inflation, is expected to hike rates an additional 25 basis points on Wednesday.

The fell 24.14 points, or 0.07%, to 34,074.02, the S&P 500 gained 0.63 points, or 0.02%, at 4,170.11 and the dropped 17.06 points, or 0.14%, to 12,209.52.

Energy stocks fell along with prices.

But S&P 500 tech shares rose. Upbeat earnings from Alphabet (NASDAQ:) Inc, Microsoft Corp (NASDAQ:) and Meta Platforms Inc (NASDAQ:) helped the benchmark S&P 500 notch its second consecutive month of gains on Friday.

Declining issues outnumbered advancers on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored decliners.

The S&P 500 posted 35 new 52-week highs and one new low. The Nasdaq Composite recorded 83 new highs and 149 new lows.