Stocks rally after earlier market worries, but First Republic continues skid

Stocks rose Monday following extensive efforts to shore up the global banking system. 

As of Monday afternoon, the Dow Jones Industrial Average rose 1.2 percent, the S&P 500 rose 0.9 percent and the Nasdaq 100 rose 0.4 percent.

That comes after UBS agreed to purchase failing bank Credit Suisse on Sunday in a deal orchestrated by Swiss regulators. Shortly after, the Federal Reserve teamed up with several central banks in an effort to bolster bank liquidity.

However, First Republic Bank’s stock plummeted more than 47 percent on Monday and is down a whopping 90 percent this month. 

Large U.S. banks on Friday deposited $30 billion into the San Francisco-based regional bank, which had been seeing huge outflows from depositors who feared a bank run. The move was meant to boost confidence in the bank, but the market selloff has only accelerated.

The financial system is under stress following the second- and third-largest bank failures in U.S. history. A bank run forced federal regulators to take over Silicon Valley Bank, which was facing huge unrealized losses on its long-term Treasury bonds that lost value due to higher interest rates. Regulators agreed to protect all deposits to shore up confidence among depositors. 

An exchange-traded fund for regional banks, which have seen their stock prices plummet amid outflows to larger institutions, rose 1.1 percent on Monday.

The VIX, which measures market volatility, fell around 5.3 percent on Monday. 

Investors are closely watching regulators’ next move. The Federal Reserve will decide this week whether to raise interest rates again.

Updated 4:25 p.m.