Selloff or Market Correction? Either Way, Here's What to Do Next!See Overvalued Stocks

U.S. stocks pressured by bank contagion fears

Published 13/03/2023, 15:08
© Reuters.
XAU/USD
-
US500
-
DJI
-
BAC
-
GS
-
JPM
-
KEY
-
CMA
-
GC
-
LCO
-
CL
-
IXIC
-
PACW
-
SBNY
-
SIVBQ
-
FRCB
-

By Liz Moyer

Investing.com -- U.S. stocks were under pressure on Monday, weighed down by tumbling bank stocks amid fear of contagion from the collapse of SVB Financial Group (NASDAQ:SIVB).

At 9:50 ET (13:50 GMT), the Dow Jones Industrial Average rose 18 points or 0.1%, while the S&P 500 fell 0.4% and the NASDAQ Composite fell 0.2%.

Regulators shut down Silicon Valley Bank on Friday and New York-based Signature Bank (NASDAQ:SBNY) on Sunday. They also announced a number of steps to shore up confidence in the banking system, offering a new bank facility and relaxing access to the Federal Reserve’s discount window to help banks reposition after rapidly rising interest rates.

Depositors of both Silicon Valley Bank and Signature will get their money back, regardless of whether it was insured. Uninsured deposits in limbo could have rippled through the economy, especially the venture capital and startup world SVB catered to. Many small companies with deposits there spent the weekend worrying about making payroll.

Whether the actions will ease broader concerns about banks remains to be seen. Shares of First Republic Bank (NYSE:FRC) were down 65% before they were halted, reaching a new 52-week low. First Republic over the weekend said it had added available funding through the Fed and JPMorgan.

Shares of PacWest Bancorp (NASDAQ:PACW) were down 51% and halted. KeyCorp (NYSE:KEY) shares were down 26% and Comerica Inc (NYSE:CMA) fell 39% and also halted. Even shares of big banks were down, with JPMorgan Chase & Co (NYSE:JPM) falling 2.7% and Bank of America Corp (NYSE:BAC) down 7.4%.

Tuesday brings the consumer price index reading for February, something the Fed is likely to take into consideration when it meets to discuss interest rates later this month. Before the weekend bank crisis erupted, expectations had risen that the Fed would raise interest rates by a half-percentage point. Now, futures traders are putting a 76% chance of no rate hike.

Those expectations were reinforced by Goldman Sachs analysts, who said they no longer expect the Fed to raise rates by a quarter of a percentage point this month.

Oil was down. Crude Oil WTI Futures fell 3.4% to $73.97 a barrel, while Brent Oil Futures were down 3% to $80.28 a barrel. Gold Futures rose 2.3% to $1,909.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.