REUTERS/Brendan McDermid
Stocks dropped sharply Friday after regulators closed Silicon Valley Bank.
The bank failure is the biggest since the 2008 financial crisis and has sparked contagion fears.
The S&P 500 is close to losing its 2023 gains.
US stocks sank Friday, with a losing week capped by the largest bank failure since the global financial crisis and the prospect of higher interest rates.
The S&P 500 was on the verge of losing its 2023 gain as it finished closer to 3,839.50, where it ended after last year’s 19% plunge. The index’s financial sector was the worst performing on Friday as regulators shut down Silicon Valley Bank to prevent a run on the tech-startups lender. The bank collapsed after this week saying higher interest rates spurred billions in losses on a $21 billion bond portfolio.
“Silicon Valley Bank was heavily reliant on the tech industry, catering mainly to startups and the investors that fund them. However, the insular ecosystem of startups and investors that it served took a hit when the Fed began raising rates to curb inflation,” Thomas Smale, CEO of FEI International, wrote Friday.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Friday:
S&P 500: 3,861.72, down 1.44%
Dow Jones Industrial Average: 31,909.83, down 1.07% (345.03 points)
Nasdaq Composite: 11,138.89, down 1.76%
Stocks had moved higher ahead of the opening bell after investors found some relief in the February jobs report.
The Labor Department said the US economy added 311,000 jobs last month, much higher than expectations of 205,000 in a Bloomberg survey of economists. But wage growth slowed to 0.2% from January’s 0.5% pace, curbing expectations the Federal Reserve will upsize its March interest rate hike to 50 basis points.
Here’s what else is happening today:
Silicon Valley Bank crisis: What you need to know about SVB Financial as its shares plunge.
“It is possible today we found our Enron,” Michael Burry said about the Silicon Valley Bank implosion.
Emerging markets investing pioneer Mark Mobius says most of his investments are in Taiwan after saying he can’t get his money out of China.
In commodities, bonds, and crypto:
West Texas Intermediate crude rose 1% to $76.46 per barrel. Brent crude, the international benchmark, rose 1.1% to $82.52.
Gold gained 1.8% to $1,869.30 per ounce.
The 10-year Treasury yield tumbled 22 basis points to 3.69%.
Bitcoin fell 1.8% to $20,007. It fell below $20,000 earlier Friday for the first …read more
Source:: Business Insider