The US markets closed lower on Friday, marking the end of a tumultuous week dominated by an unfolding crisis in the banking sector and the gathering storm clouds of possible recession.
All three indexes ended the session deep in negative territory, with financial stocks down the most among the major sectors of the S&P 500.
The Dow Jones Industrial Average fell 384.57 points, or 1.19 per cent, to 31,861.98, the S&P 500 lost 43.64 points, or 1.10 per cent, to 3,916.64 and the Nasdaq Composite dropped 86.76 points, or 0.74 per cent, to 11,630.51.
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All 11 major sectors of the S&P 500 ended the session in negative territory. On the upside, FedEx Corp jumped 8 per cent after hiking its current fiscal year forecast.
The S&P 500 posted 5 new 52-week highs and 20 new lows; the Nasdaq Composite recorded 29 new highs and 320 new lows. Volume on US exchanges was 19.41 billion shares, compared with the 12.49 billion average over the last 20 trading days.
For the week, while the benchmark S&P 500 ended higher than last Friday’s close, the Nasdaq and the Dow posted weekly declines.
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SVB Financial Group announced it would seek Chapter 11 bankruptcy protection, the latest development in an ongoing drama that began last week with the collapse of Silicon Valley Bank and Signature Bank, which sparked fears of contagion throughout the global banking system.
Over the last two weeks, the S&P Banking index and the KBW Regional Banking index plunged by 4.6 per cent and 5.4 per cent, respectively, their largest two-week drops since March 2020.
US-traded shares of Credit Suisse also closed sharply lower, down 6.9 per cent.
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Investors now turn their gaze to the Federal Reserve’s two-day monetary policy meeting next week.
In view of recent developments in the banking sector and data suggesting a softening economy, investors have adjusted their expectations regarding the size and duration of the Fed’s restrictive interest rate hikes, according to a Reuters report.
With Reuters Inputs