Wall Street's week of turmoil closed with more sharp drops for stocks on Friday as worries worsened about the banking industry, per the AP.
- The S&P 500 fell 43 points, or 1.1%, to 3,916.
- The Dow fell 384 points, or 1.1%, to 31,861.
- The Nasdaq 86 points, or 0.7%, to 11,630.
This week has been a whipsaw for markets around the world as concern rises following the second- and third-largest US bank failures in history. Just a day earlier, markets rallied in relief after two banks on both sides of the Atlantic tapped into tens of billions of dollars of cash to bolster their finances. But on Friday, some of the hope was washing out, and the pair were back to falling. In Switzerland, Credit Suisse shares dropped 8%. On Wall Street, shares of First Republic Bank sank more than 30% and were on their way to a plunge of about 70% for the week.
The two banks have different sets of issues challenging them, but the overriding fear is that the banking system may be cracking under the weight of the fastest set of hikes to interest rates in decades. “If the Fed hikes this far this fast, something will break," said Ross Mayfield, investment strategy analyst at Baird. “There’s a very clear and evident history of that happening, even in slower, smaller rate-hike cycles.” Still, analysts have been quick to say the current chaos for banks looks nowhere near as bad as the 2007-08 financial crisis.
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