US Stocks Rally to Close Friday        03/24 16:01

   A late-afternoon turnaround on Wall Street left stocks higher Friday as the 
market shook off a weak start amid worries about banks on both sides of the 
Atlantic.

   (AP) -- A late-afternoon turnaround on Wall Street left stocks higher Friday 
as the market shook off a weak start amid worries about banks on both sides of 
the Atlantic.

   The S&P 500 rose 0.6% after slipping for most of the morning. The benchmark 
index marked its second straight weekly gain. The Dow Jones Industrial Average 
rose 0.4%, while the Nasdaq composite ended 0.3% higher.

   The upbeat close to the week came as markets have been turbulent on worries 
that banks are weakening under the pressure of much higher interest rates. 
That's led to rising concerns about a possible recession and heavy uncertainty 
about what the Federal Reserve and other central banks will do with interest 
rates going forward.

   "There are concerns out there about, obviously, a more severe bank crisis, 
both domestically and in Europe, and yet somehow markets are looking past 
that," said Randy Frederick, managing director of trading & derivatives at 
Charles Schwab.

   On Friday, much of the focus was on Deutsche Bank, whose stock tumbled 8.5% 
in Germany. Earlier this month, shares of and faith in Swiss bank Credit Suisse 
fell so much that regulators brokered a takeover of it by rival UBS.

   Credit Suisse faced a relatively unique set of longstanding troubles. But 
the second- and third-largest U.S. bank failures in history earlier this month 
have cast a harsher spotlight across the entire banking industry.

   Other big European banks also fell Friday, including a 5.5% drop for 
Germany's Commerzbank, a 5.3% fall for France's BNP Paribas and a 3.5% loss for 
UBS.

   Bank stocks ended mixed on Wall Street. JPMorgan Chase fell 1.5%, while Bank 
of America rose 0.6%.

   In the U.S., the hunt by investors has primarily been for banks that could 
face a debilitating exodus of customers, similar to what helped cause the 
failures of Silicon Valley Bank and Signature Bank.

   Investors have zeroed in on smaller and midsized banks, the ones below in 
size of the "too-big-to-fail" banks and seen as greater risks.

   First Republic Bank closed 1.4% lower. It's down 90% for the year.

   Treasury Secretary Janet Yellen has said that in cases where the government 
sees a risk to the overall system, it will guarantee deposits for bank 
customers, even those with more than the $250,000 insured by the Federal 
Deposit Insurance Corp. That's what regulators did for both Silicon Valley Bank 
and Signature Bank.

   But Yellen this week also stopped short of a blanket guarantee for all 
depositors at all banks.

   Cash-short banks were still lining up this week to borrow money from the 
Fed. The Fed said Thursday that emergency lending to banks fell slightly in the 
past week -- to $164 billion -- but remained high.

   A big worry is that all the pressure on banks will cause a pullback in 
lending to small and midsized businesses across the country. That in turn could 
lead to less hiring, a weaker economy and a higher potential for a recession 
that many economists already saw as likely.

   While the job market has remained remarkably solid, other parts of the 
economy have already begun to weaken under the weight of higher rates. On 
Friday, reports on the economy came in mixed. One showed orders for 
long-lasting manufactured goods were slower last month than economists expected.

   A second report, though, suggested the fastest uptick in business activity 
for almost a year. The preliminary report from S&P Global topped economists' 
expectations.

   Federal Reserve Chair Jerome Powell said worries about a pullback in lending 
helped push the Fed to raise rates by only a quarter of a percentage point this 
week, instead of a more aggressive half point, in its campaign to battle 
inflation.

   Higher rates can undercut inflation by slowing the entire economy, but they 
raise the risk of a recession. They also hurt prices for stocks and other 
investments. For Silicon Valley Bank and other banks, that meant hits to the 
super-safe Treasury bonds they owned.

   The Fed has raised its key overnight interest rate to a range of 4.75% to 
5%, up from virtually zero at the start of last year. It's hinted it may raise 
rates one more time before holding them there through the end of the year.

   Traders are more skeptical, though. The rising possibility of a recession 
has them betting heavily that the Fed will have to cut interest rates as soon 
as this summer to release some of the pressure on banks and the economy.

   "Whether or not that happens, I don't know, and obviously these things 
change a lot, but I would say there's a very reasonable probability to say that 
rates right now may be as high as they're going to go and we may just go 
sideways for a while," Frederick said.

   Such speculation has added to an increased drive by investors to pile into 
anything seen as safe, which together have caused huge, sometimes violent 
swings in the bond market.

   On Friday, yields fell further. The 10-year yield, which helps set rates for 
mortgages and other loans, fell to 3.38% from 3.42% late Thursday. It was above 
4% earlier this month.

   The drop has been even more dramatic for the two-year Treasury yield, which 
more closely tracks expectations for the Fed. It sank to 3.77% from 3.83% late 
Thursday and from more than 5% earlier this month.

   All told, the S&P 500 rose 22.27 points to 3,970.99. The Dow added 132.28 
points to 32,237.53. The Nasdaq gained 36.56 points to close at 11,823.96.

   Small company stocks outgained the broader market. The Russell 2000 index 
rose 14.63 points, or 0.9%, to 1,734.92.