Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Stock market today: Dow slides as Credit Suisse slump keeps banks in firing line

Published 03/16/2023, 04:28 AM
Updated 03/16/2023, 04:28 AM
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com -- The Dow closed lower Wednesday as distress in Credit Suisse stoked further worries about a looming banking crisis and fueled more bearish bets on banks.

The Dow Jones Industrial Average fell 0.9%, or 280 points, the Nasdaq Composite was up 0.1%, and the S&P 500 was down 0.7%.

Credit Suisse Group (NYSE:CS) fell 14%, taking losses for the year to 40% amid growing concerns about a run on the Swiss bank after its biggest backer, Saudi National Bank, said it wouldn’t be able to provide further financial support, citing regulatory restrictions. The Swiss National Bank, however, helped ease concerns, pledging to provide Credit Suisse with liquidity if needed.

The turmoil in Credit Suisse added to growing concerns about a widespread banking crisis at a time when some U.S. banks are also in the spotlight.

First Republic Bank (NYSE:FRC) fell more than 20% after the S&P Global, a credit rating agency, downgraded the bank’s creditworthiness to BB+, or “junk” status,  from A-, amid concerns that depositors may pull their money.

Worries about a deepening banking crisis come even as the Fed stepped in to rescue the Silicon Valley Bank and Signature Bank, while also launching a new lending facility to prevent further runs in banks.

Still, that hasn’t stemmed the crisis of confidence in the banking sector, pushing the odds of the no-rate hike higher to nearly 50% from 20% a day earlier, according to Investing.com’s Fed Rate Monitor Tool.

The calls for the Fed to pause were further strengthened following economic data showing cooling wholesale inflation and signs of weakness in the consumer as retail sales unexpectedly slowed.

Retail sales are expected to slow further in coming months, Morgan Stanley says, as the emergency allotments benefits expired in March, the “labor market continues to cool, and households become more cautious spenders, drawing down less and less on their excess savings…”

Energy stocks, down more than 5%, were also a big drag on the broader market as oil prices fell amid fears of the impact of a potential banking crisis on global growth and energy demand.

APA Corporation (NASDAQ:APA), Baker Hughes Co (NASDAQ:BKR), and ConocoPhillips (NYSE:COP) were among the biggest decliners.

Tech, meanwhile, was flat as lower Treasury yields pushed big tech stocks higher, and helped offset a dip in semiconductor stocks.

Google-parent Alphabet (NASDAQ:GOOGL) led big tech higher, up more than 2%, while Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), ended the day in the green.  

The market selloff has pushed stocks into oversold territory, setting up the potential for a rebound, Janney Montgomery Scott said, adding that the overall bottoming cycle remains intact.

“The overall basing/bottoming cycle remains intact in our view, but the ride may get bumpier before it gets better. Markets remain oversold and coiled for potential mean reversion rallies ahead- we’re just waiting on something to trigger a more notable reversal ahead.”

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.