US Stocks End Lower As Banking Shares Resume Sell-off

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2023-03-18 HKT 05:29

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  • All three major Wall Street indexes ended lower. File photo: AFP

    All three major Wall Street indexes ended lower. File photo: AFP

US stocks ended lower on Friday as banking shares resumed their selloff, with embattled First Republic Bank closing down 33 percent despite a $30 billion rescue package unveiled on Thursday.

The Dow Jones ended 1.2 percent lower at 31,861, the S&P 500 fell 1.1 percent to 3,916, and the Nasdaq declined 0.7 percent to end at 11,630.

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. "Given that kind of an environment, it's not at all surprising that people took some chips off the table before the weekend."

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 percent 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 percent, while those of KeyCorp fell more than six percent on Friday.

Large banks too were hit, with Bank of America and Wells Fargo both losing around four percent.

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

The US central bank will announce on Wednesday whether or not it will continue hiking interest rates to tackle inflation or halt them amid the ongoing concerns about the banking sector. (AFP)