us Stock market news:
us Stock market news: Stock market crushed
Stocks were pulled lower on Friday by worries about the banking sector and investors stayed ahead of a key February report scheduled for Friday morning.
At the closing bell, the S&P 500 (^GSPC) was down 1.8%, the Dow Jones (^DJI) was down 1.6%, or 542 points, and the Nasdaq Composite (^IXIC) was down 2%.
Friday's sell-off accelerated during trading, as a fall in SVB Financial ( SIVB ) stock lifted bank stocks and raised concerns about unforeseen consequences ahead of the Federal Reserve's interest rate hike campaign on the financial system. On Wednesday, SVB announced a capital increase of $2.25 billion and the sale of nearly all of its securities at a cost of $1.8 billion. The Silicon Valley Bank business group is the bank for startups and other players in the business world.
In a note to investors on Wednesday, the company said: "We are taking these actions because we expect continued high prices, demand in the public and private markets, and raising capital from our customers while investing in their businesses." The information was revealed on Thursday evening Greg Becker, CEO of Silicon Valley Bank, said in a call with investors, "I ask everyone to stay calm and support us as our support for you in difficult times." Becker told investors that "there is a lot of liquidity", but according to him, "if everyone says that SVB is in trouble, it will be difficult". SVB shares fell 60% on Friday. This decline also weighed on the regional banks, with the SPDR Regional Banking ETF (KRE) down 8% and the SPDR Financial Sector ETF (XLF) down 4%. Among major US financial institutions, shares of JPMorgan ( JPM ) , Bank of America ( BAC ) and WFC WFC fell more than 5% on Thursday. First Republic Bank (FRC), which runs a large real estate business, saw its shares fall 16% during trading on Friday. As Bloomberg's Jonathan Pero noted, Friday marked the moment in the entire cycle when high rates were both good and bad for banks. Heading into Friday, labor market data will be key for the market as investors await a key jobs report scheduled for release on Friday morning.
The weekly report on initial unemployment insurance claims on Thursday morning showed 211,000 claims were filed last week, up 21,000 from the previous weak and what Oxford Economics economists called the "first hint of weakness" in the data. "The jump in jobless claims to 211,000 last week from 190,000 is the first sign of weakness in the claims data this year, but it was too short of the 300,000+ level to match the recovery," Michael Pearce, chief U.S. economist at Oxford Economics, wrote in a letter to consumers. "As the Fed reaches further increases, we expect more layoffs." The first jump in prices after the data came two days after a report from Federal Reserve Chairman Jerome Powell clearly saw interest rates rising more than expected amid strong labor market data and inflation.
"The jump in jobless claims to 211,000 last week from 190,000 is the first sign of weakness in the claims data this year, but it was too short of the 300,000+ level to match the recovery," Michael Pearce, chief U.S. economist at Oxford Economics, wrote in a letter to consumers. "As the Fed moves forward with further hikes, we expect more layoffs."
The first breakout from the stock market after Monday came after two days of reports from Federal Reserve Chairman Jerome Powell that he expects interest rates to rise more than expected. Expected in the ṭṭṭa of the ṭṭṭa of the ṭṭṭa of ṭṭṭa active performance and data inflation.
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