U. S. stock market closes week with fall due to problems in banking sector
2023.03.10 15:08
U. S. stock market closes week with fall due to problems in banking sector
By Tiffany Smith
Budrigannews.com – As regulators closed SVB Financial to protect customer funds after the beleaguered bank’s attempt to secure funding failed, fears of contagion swept through banking stocks and caused the S&P 500 to fall on Friday.
The Nasdaq Composite was down 1.8%, the Dow Jones Industrial Average was down 1%, or 333 points, and the S&P 500 was down 1.4%.
(NASDAQ) SVB Financial Group In order to safeguard depositors, (SIVB) was shut down by regulators and its deposits placed under their control.
Regional banks, which typically have fewer diversified funding sources than their larger counterparts, were targeted by the news, which sparked widespread concerns of a spillover into the entire banking industry.
(NASDAQ) Signature Bank First Republic Bank (NYSE: SBNY) and JPMorgan Chase & Co. (NYSE: FRC) and JPMorgan Chase & Co. JPM) and Wells Fargo and Company (NYSE: WFC) were up amid hopes that depositors will look for security in larger banks.
Even though job gains in February exceeded expectations, investors had to rethink their bets on larger rate hikes at the Federal Reserve’s March meeting due to bank turmoil, which raised concerns about a systematic banking crisis.
Although there were some indications of a softening in the labor market, such as a tick up in the unemployment rate and a slower rate of wage growth, the U.S. economy created 311,000 jobs last month, which was significantly more than what was anticipated.
In a note, Jefferies stated, “It is difficult to say that cracks are forming in the labor market when payrolls increase 311k, but it seems like we are at least at the “beginning of the beginning” of the process of seeing the labor market soften.”
According to Fed Rate Monitor Tool, investors reduced their wagers on a 50 basis point rate hike in March to 50% from approximately 80% a day earlier.
This week, Treasury yields fell sharply after reaching their highest level in more than a decade. This helped the market as a whole recover some of its losses.
Regarding earnings, DocuSign’s (NASDAQ) The announcement that DOCU’s chief financial officer Cynthia Gaylor would resign later this year overshadowed the company’s better-than-expected quarterly results.
(NYSE) Oracle Corporation In contrast, (ORCL) reported mixed fourth-quarter results, with revenue falling short of Wall Street expectations, causing the stock to fall more than 3%.
Goldman Sachs reiterated its sell rating on Oracle following the results due to concerns regarding the impact of capital expenditure pressure on margins, expectations for a slowdown in revenue from subscription services, and losses in database market share.
Other Places Gap (NYSE) GPS reported guidance that was below Wall Street estimates and a larger quarterly loss. Although the retailer’s guidance was deemed to be “sobering,” Credit Suisse stated that there was “less risk of further downward revisions beyond the initial guidance.”
