Stock market today: Tokyo wins, most Asian markets are closed

By ELAINE KURTEBACH
AP business writer

Stocks rose in Tokyo and Sydney on Monday, while most Asian markets were closed for the May 1 holiday.

Traditional Labor Day holidays around the world likely limited initial market reactions to a delay in an expected decision by US regulators on what to do with troubled First Republic Bank.

San Francisco-based First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March, as investors and depositors fear the bank won’t survive much longer as an independent entity.

First Republic is seen as the most likely next bank to fail due to its large number of uninsured deposits and exposure to low interest rates. It was thought regulators were trying to sell all or part of the bank before markets reopened for trading on Monday.

The bank’s stock closed Friday at $3.51, a fraction of the roughly $170 per share it traded for a year ago.

“A quiet open Monday shaded by a holiday vibe with an undertone of no-news-is-good-news on the Frist Republic Front,” Stephen Innes of SPI Asset Management said in a comment.

During Asian trading Monday, the Nikkei 225 index in Tokyo rose 0.7% to 29,056.25 and the S&P/ASX 200 in Sydney rose 0.6% to 7,352.20. Other markets in the region were closed.

On Friday, the S&P 500 gained 0.8% to 4,169.48 points. Despite some sharp swings this week, it still posted a second consecutive winning month. The Dow Jones Industrial Average rose 0.8% to 34,098.16 and the Nasdaq index gained 0.7% to 12,226.58.

Exxon Mobil did some of the market’s tougher work after it rose 1.3%. It reported stronger earnings and sales for the last quarter than expected.

Intel gained 4% after reporting a milder-than-expected loss and stronger sales for the last quarter. Mondelez International, the food giant behind Oreo and Ritz, rose 3.9% after beating Wall Street estimates. It also raised its full-year revenue and profit forecast.

They helped offset a 4% decline Amazon, which weighed heavily on the market despite earnings and sales for the last quarter coming in stronger than expected. Analysts pointed to a slowdown in revenue growth at its AWS cloud computing business.

The economy is slowing under the weight of higher interest rates designed to bring inflation under control. While most companies have beat expectations so far this reporting season, expectations have been low given forecasts that the economy could slide into recession.

Based on recent economic reports, traders are betting that the Federal Reserve will hike rates again next week and possibly in June at a meeting.

A report on Friday said the inflation measure which the Fed prefers to use came close to expectations for March, but is well above target. Wages also rose more than economists had expected during the first three months of the year, possibly putting inflation more firmly in place.

The Fed has raised its key overnight interest rate to the highest level since 2007, up from its record low, following a barrage of rate hikes since the beginning of last year. Together, they have already slowed economic growth to an estimated 1.1% year-on-year at the start of this year.

They have also created cracks in the banking system.

The Federal Reserve announced this on Friday blaming the bankruptcy of Silicon Valley Bank on a combination of poor banking management, weakened regulation and lax government oversight.

On other trading Monday, US benchmark crude was up 63 cents to $76.15 a barrel in electronic trading on the New York Mercantile Exchange. It gained $2.02 on Friday.

Brent crude, the price benchmark for international trade, lost 61 cents to $79.72 a barrel.

The US dollar rose from 136.24 yen to 136.75 Japanese yen. The euro weakened from $1.0023 to $1.1006.