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US Stocks Mostly Steady Tuesday        03/28 16:13

   Stocks were mixed Tuesday as Wall Street regains some stability at the tail 
end of what's been a turmoil-filled month.

   NEW YORK (AP) -- Stocks were mixed Tuesday as Wall Street regains some 
stability at the tail end of what's been a turmoil-filled month.

   The S&P 500 dipped 6.26 points, or 0.2%, to 3,971.27, though the majority of 
stocks within the index rose. The Dow Jones Industrial Average slipped 37.83, 
or 0.1,%, to 3,394.25, and the Nasdaq composite fell 52.76, or 0.4%, to 

   There was relative calm even in the bond market, which has been home to some 
of Wall Street's wildest moves since fears flared about the banking system 
earlier this month. Yields were rising only modestly following their 
historic-sized moves in prior weeks.

   This month has been dominated by worries that banks around the world may be 
cracking under the pressure of much higher interest rates. But some calm has 
returned to the market recently after regulators made big moves to protect the 

   That has much of Wall Street's attention back on interest rates and what 
central banks will do next with them. The Federal Reserve and other central 
banks have a tough decision: Inflation is still high, which would typically 
call for even higher interest rates. But the weakness for banks has shown some 
fragility in the system that higher rates could worsen.

   "I think the global central banks have put us in that middling zone, where 
we're waiting for clarity on: Are they done?" said Rob Haworth, senior 
investment strategist at U.S. Bank Wealth Management.

   After the Fed hiked its key overnight rate all the way to a range of 4.75% 
to 5%, up from virtually zero early last year, the market could find some 
relief if the Fed does take a pause after hiking one more time as it's hinted, 
Haworth said.

   "That's a dramatic change" in rates over just a year, he said. "Just getting 
to some form of stability provides some clarity for planning to begin."

   Traders built bets Tuesday to say the Fed will raise rates at its next 
meeting in May, though the slight majority is still calling for it to hold 
rates steady.

   Higher rates try to slow inflation by hitting the entire economy with a 
blunt hammer. They also drag on prices for stocks along the way, particularly 
technology and other high-growth stocks.

   Apple, Microsoft and other Big Tech stocks were among the heaviest weights 
on the S&P 500 Tuesday after dipping modestly.

   On the winning side was McCormick & Co., which jumped 9.6% after the spices 
and seasonings company reported stronger profit and revenue for its latest 
quarter than analysts expected.

   Other stocks were mixed, including financial stocks that have had a 
turbulent month. Most of those in the S&P 500 rose, but some banks that 
investors have highlighted as most at risk fell after erasing gains from the 

   First Republic fell 2.3%, while PacWest Bancorp. was down 5%.

   The harshest focus has been on smaller and midsized banks in the hunt for 
who could be next to suffer an exodus of customer akin to the run that toppled 
Silicon Valley Bank.

   One of the broader worries has been that all the furor for banks could lead 
to a pullback in lending to businesses across the country. That in turn could 
lead to less economic growth and a higher risk of a recession.

   Jan Hatzius, chief economist and head of global investment research at 
Goldman Sachs, recently raised his probability of a recession over the next 
year to 35% from 25%. But in a report, he called the banking industry's 
struggles "a headwind, not a hurricane" for the economy.

   Reports on the economy have been coming in mixed. The job market remains 
remarkably solid, while smaller corners of the economy have been showing more 

   On Tuesday, one report showed that confidence among consumers is 
strengthening, contrary to economists' expectations for a moderation. Another 
report suggested U.S. home prices softened in January from December, but not by 
quite as much as economists expected.

   Traders are still largely betting the Fed will have to cut rates as soon as 
this summer to prop up the economy. Such bets have returned in force since the 
banking industry's woes began. They also materialized almost as quickly as a 
prior round of bets for rate cuts had earlier disappeared following data 
suggesting stickier-than-expected inflation.

   Such drastic shifts in expectations for the Fed have led to huge swings in 
the bond market. On Tuesday, yields were rising by only a bit.

   The yield on the 10-year Treasury, which helps set rates for mortgages and 
other important loans, rose to 3.55% from 3.54% late Monday.

   The two-year yield, which moves more on expectations for the Fed, rose to 
4.05% from 4.01% late Monday. It was above 5% earlier this month and at its 
highest level since 2007.

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