The Dow fell 345 points in the biggest bank failure since 2008.
- Shares fell sharply on Friday after regulators shut down a Silicon Valley bank.
- The bank’s collapse was the largest since the 2008 financial crisis and raised fears of contagion.
- The S&P 500 is close to losing its 2023 gains.
US stocks tumbled on Friday as a losing week ended with the biggest 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 closed closer to 3839.50, where it ended after last year’s 19% drop. The index’s financial sector performed worst on Friday as regulators shut down a Silicon Valley bank to prevent a run on a tech startup lender. The bank collapsed after saying this week that higher interest rates had triggered billion-dollar losses on a $21 billion bond portfolio.
“The Silicon Valley Bank was heavily dependent on the tech industry, serving mostly start-ups and the investors who funded them. However, the closed ecosystem of startups and investors it served suffered when the Fed began raising rates to curb inflation,” Thomas Smale, CEO of FEI International, wrote on Friday.
Here’s where the US indices were on the close call at 4:00 pm on Friday:
Shares rose ahead of the open after investors felt some relief in the February jobs report.
The Labor Department said the US economy added 311,000 jobs last month, much higher than expected of 205,000, according to a Bloomberg poll of economists. But wage growth slowed to 0.2% from 0.5% in January, dampening expectations that the Federal Reserve will increase its March interest rate hike to 50 basis points.
Here’s what else is happening today:
In commodities, bonds and cryptocurrencies:
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