U.S. stocks pressured by bank contagion fears

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:).

At 9:50 ET (13:50 GMT), the rose 18 points or 0.1%, while the fell 0.4% and the fell 0.2%.

Regulators shut down Silicon Valley Bank on Friday and New York-based Signature Bank (NASDAQ:) 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:) 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:) were down 51% and halted. KeyCorp (NYSE:) shares were down 26% and Comerica Inc (NYSE:) fell 39% and also halted. Even shares of big banks were down, with JPMorgan Chase & Co (NYSE:) falling 2.7% and Bank of America Corp (NYSE:) down 7.4%.

Tuesday brings the 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 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. fell 3.4% to $73.97 a barrel, while were down 3% to $80.28 a barrel. rose 2.3% to $1,909.