Dow falls as bank stocks tumble – RT Business News

U.S. markets were down on Friday to end the worst week for the banking sector in more than a decade

Bank stocks led U.S. markets lower on Friday as worries about the health of the financial sector continued to grow among investors.

The Dow Jones Industrial Average was down more than 400 points, or 1.3%, at 4:10 p.m. GMT. The S&P 500 fell 1.15% and the tech-heavy Nasdaq Composite fell 0.9%.

The fall was led by financials, with First Republic Bank shares falling 20% ​​in early trading after the bank suspended its dividend payout and analysts said it faced a “terrible” prospects. On Thursday, major U.S. banks including JPMorgan Chase and Morgan Stanley threw a $30 billion lifeline to the struggling regional lender.

The banking sector’s troubles deepened as SVB Financial Group announced on Friday that it had filed for Chapter 11 bankruptcy in New York to seek buyers for its assets. The announcement came days after its former Silicon Valley Bank unit was shut down by US regulators.

“Deposits fled from regional banks like the First Republic to the big banks which are now bailing them out by handing over the deposits. But that doesn’t solve the problem.” Great Hill Capital chairman Thomas Hayes told Reuters.

“Until you stop the flight of deposits from regional banks to systematically large banks that are too big to fail, no matter how much money you pour into the bucket,” he added.

The First Republic Bank bailout announcement follows a 50 basis point rate hike by the European Central Bank (ECB), which remained focused on tackling inflation despite growing concerns about banks in the the region.

Investors will now closely watch the US Federal Reserve’s interest rate decision, which is due next week.

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