NEW YORK (dpa-AFX) – The US stock exchanges have caught up again after the price slide the day before. While many bank stocks continued to suffer on Friday from fears of loan defaults given the already sharp rise in interest rates, the latest data from the labor market calmed the market down a bit overall. The bottom line is that the most important indices moved only slightly.
The leading index Dow Jones Industrial increased by 0.16 percent to 32,306.10 points. On a weekly basis, however, this indicates a loss of more than three percent.
The market-wide S&P 500 fell 0.16 percent on Friday to 3911.91 points. The tech-heavy Nasdaq 100 fell 0.05 percent to 11,989.61 points.
The job market continued to be robust in February with a high increase in jobs. However, the picture is not clear. The unemployment rate has risen surprisingly and the increase in hourly wages has slowed.
In view of the development of the quota and hourly wages, the markets seem to have increased expectations that the US Federal Reserve could only raise its key interest rate by 0.25 percentage points on March 22. Fed chief Jerome Powell recently raised the issue by 0.50 percentage points. However, he had made the decision dependent on the development of economic data. A strong labor market also drives inflation via wage developments.
In addition to the labor market report, the banking sector is the focus of events, as was the case on the previous day. The papers of the ailing SVB Financial collapsed in pre-market trading by almost 70 percent after having lost more than 60 percent the previous day. Trading in the paper is currently suspended. Two days ago, the shares cost almost seven times as much. Investors are likely to withdraw massive amounts of funds as they fear for the health of California’s Silicon Valley Bank, which is a subsidiary of SVB Financial.
The Silicon Valley Bank needs a capital increase in the billions to cushion losses from the portfolio. However, according to the news channel CNBC, efforts to do so have failed, so that negotiations for a sale are being held. The first voices are also being heard calling for a government bailout of the financiers of small and medium-sized tech and biotech companies.
The high price losses of many bank shares the day before in the wake of SVB Financial have clouded the mood for the industry as a whole. The biggest sell-off in the banking sector in almost three years took place on Thursday.
The news about the venture capitalist for young companies “raised more questions than answers” among investors, wrote analyst Craig Erlam from the trading house Oanda. Deutsche Bank analyst Jim Reid noted that SVB Financial’s troubles had been brewing in the background for a while but “exploded” the day before.
Bank stocks mostly remained under pressure on Friday, although the fresh data from the labor market had ensured that the general fear of an economic slowdown as interest rates continued to rise sharply diminished somewhat. In the Dow, Goldman Sachs shares lost two percent. At the bottom of the S&P 500, First Republic Bank fell 15 percent. JPMorgan shares turned positive and recently gained 1.6 percent./la/he
