US stocks end lower as banking shares resume selloff

1 week ago 37

NEW YORK - US stocks ended lower on Friday as banking shares resumed their selloff, with embattled First Republic Bank closing down 33 per cent despite a US$30 billion (S$40 billion) rescue package unveiled on Thursday.

The Dow Jones Industrial Average ended 1.2 per cent lower at 31,861.98 and the broad-based S&P 500 fell 1.1 per cent to 3,916.64.

Meanwhile, the tech-heavy Nasdaq Composite Index declined 0.7 per cent to end at 11,630.51.

The collapse of Silicon Valley Bank (SVB) last weekend triggered an unruly week of trading that spread far beyond the banks, impacting everything from bond yields to oil, according to FHN Financial’s Christopher Low.

“The volatility we saw this week was just remarkable,” he said in an interview with AFP.

“Given that kind of an environment, it’s not at all surprising that people took some chips off the table before the weekend,” he said.

First Republic’s stock plunged on Friday after it announced it was suspending its dividend amid ongoing concerns about its long-term financial health.

The San Francisco-headquartered bank’s shares ended down more than 70 per cent for the week, despite rallying on Thursday after 11 of America’s biggest banks announced a relief package for the lender.

First Republic’s woes capped another tumultuous day for regional banks amid lingering contagion fears in the wake of SVB’s collapse.

Shares of PacWest Bancorp ended the day down almost 19 per cent, while those of KeyCorp fell more than 6 per cent on Friday.

Large banks too were hit, with Bank of America and Wells Fargo both losing around 4 per cent.

Analysts and traders are now keenly eyeing next week’s monetary policy decision by the US Federal Reserve.

The US central bank will announce Wednesday whether or not it will continue hiking...

Read Entire Article