federal reserve is expected to deliver a quarterpoint rate hike on wednesday us stocks closed lower on monday giving up modest early gains after it was announced that jpmorgan chase  co would purchase much of failed first republic bank some analysts left open the possibility of further turmoil in the regional banking sector as investors turned their focus to this weeks federal reserve policy meeting stocks ended april on a positive note friday brushing off banking jitters the dow notched its best monthly performance since january up 25 in april while the sp 500 advanced 15 and the nasdaq gained less than 01 for the month according to dow jones market data a federal reserve decision looms this week but the big news to kick off the week was in the us banking sector in a deal announced on monday jpmorgan chase  cojpm agreed to buy the bulk of californias first republic bankfrc  after an auction that reportedly included pnc financial services group inc pnc  and will split losses with the federal deposit insurance corp the fdic said the depositinsurance fund is likely to take a 13 billion hit jpmorgan which estimates the acquisition will generate more than 500 million of incremental net income per year saw its shares finish 21 higher pnc shares ended down by 63 trading was halted on shares of first republic which have plunged nearly 98 so far this year first republic came under renewed pressure last week after it disclosed 100 billion in deposit losses during the first quarter key wordscharlie munger says banks full of bad loans on commercial property report analysts said the latest round of banking troubles was not causing serious repercussions in the broader markets though some had doubts about whether regional banks could withstand further fallout i dont think theres a true risk of contagion in the banking sector and the market barely blinked on the news of jpmorgans purchase earlier in the day said eric sterner chief investment officer at apollon wealth management which manages 35 billion from mount pleasant sc but certainly theres a risk of sentiment contagion sterner said via phone on monday citing social medias impact on customers willingness to withdraw deposits we may see some other regional banks that struggle and the debate now is should there be more regulationjerry braakman president and chief investment officer of santa ana californiabased first american trust stood by comments he made to marketwatch on friday when he said that regionalbanking woes have more room to run among other things braakman said that all banks will be impacted by a weakening us economy as credit losses and defaults rise over the next three to nine months in addition he said banks of all sizes have liquidity risk in a bank run scenario first american trust is a subsidiary of first american financial corp faf see this stockmarket gauge shows investors are brushing off banking debtceiling and recession worries will it last meanwhile attention remains on the fed which is widely expected to raise the fedfunds rate by another 25 basis points or quarter of a percentage point when policy makers conclude a twoday meeting on wednesday investors are looking for the fed to signal the potential for a subsequent pause in rate increases with traders pricing in rate cuts by yearend read stockmarket investors want the fed to answer this crucial question when it meets this week mondays economic data included the latest reading of the institute for supply managements closely watched manufacturing index which the institute for supply managements april manufacturing index rose to 471 from 463 in the prior month economists surveyed by the wall street journal on average had looked for the index to rise to 467 the key barometer of us factory activity has remained in contraction territory six months in a row  with any numbers below 50 signaling ongoing malaise spending on construction projects rose 03 in march at a seasonally adjusted annual rate of 183 trillion the commerce department reported monday economists polled by the wall street journal had expected a flat reading several foreign stock exchanges in europe and asia were shut for may 1 holidays mark hulbertsell in may not so fast stay and play this summer in safer stockmarket sectors this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal