Stocks rose on Monday as market participants were encouraged by UBS's (NYSE: USB) takeover of Credit Suisse (NYSE: CS) in a bid to stabilize the global banking sector. The Dow Jones Industrial Average climbed nearly 400 points, while the S&P 500 Index and Nasdaq Composite added about 0.9% and 0.4%, respectively.
Here's how the market settled on Monday:
S&P 500 Index (NYSE: SPY): +0.89% or +34.93 points to 3,951.57
Dow Jones Industrial Average (NYSE: DIA): +1.20% or +382.60 points to 32,244.58
Nasdaq Composite Index (NASDAQ: QQQ): +0.39% or +45.03 points to 11,678.54
Over the week, UBS purchased Credit Suisse at a steep discount in a deal orchestrated by Swiss authorities and regulators in effort to ease contagion risks for the global banking system following multiple U.S. bank failures in recent weeks.
The size of Credit Suisse was a concern for the banking system, as the the lender has multiple international subsidiaries. UBS said the combined bank will be a massive lender, with more than $5 trillion in total invested assets and "sustainable value opportunities," UBS said in a release.
"This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is am emergency rescue," UBS Chair Colm Keller said in a statement.
Regional bank stocks gained some ground on Monday, rebounding from big losses in the past week. The SPDR Regional Banking ETF (NYSE: KRE) rose over 1% after falling 14% last week, with PacWest (NASDAQ: PACW), First Citizens (NASDAQ: FCNCA) and Fifth Third Bancorp (NASDAQ: FITB) leading gains. However, some of its early session gains were reversed as First Republic Bank (NYSE: FRC) share continued to stink after its second downgrade from S&P Global Ratings in four days.
Meanwhile, Silicon Valley Bank remains unsold as of Monday. The Federal Deposit Insurance Corp (FDIC) said on Monday that it had extended the bidding process on the lender and will be taking separate offers for SVB's commercial and private lending businesses.
Elsewhere, Starbucks (NASDAQ: SBUX) shares were higher on Monday after the coffee company announced Laxman Narasimhan as the Seattle-based chain's new CEO, with Howard Schultz exiting his position early.
Looking ahead, all eyes will be on the Federal Reserve's next monetary policy decision due out Wednesday afternoon, with investors expecting the central bank to deliver a 25 basis point rate hike. Earnings from Nike (NYSE: NKE) and Darden Restaurants (NYSE: DRI) are also slated for release this week, giving more clues on the state of the consumer in response to persistently high inflation and rising interest rates.