Major stock indexes fell in the past hour of trading, closing near session lows on a tumultuous day on Friday. Investors were shaken by the shutdown of Silicon Valley Bank, which affected the entire sector.
The Dow Jones Industrial Average fell 1.1%. The S&P 500 fell 1.5%. The Nasdaq composite lost 1.8%. The small cap Russell 2000 fared less well, down 2.9%, weighed down by its 15% banking component.
NYSE and Nasdaq volume was higher than Thursday, in preliminary numbers.
The S&P 500 and Dow found resistance at their 200-day moving averages in an earlier bounce attempt today. Both closed below this line. The Nasdaq fell below its 50-day moving average, a day after closing below the 200-day line.
The tech-heavy Invesco QQQ Trust ETF (QQQ) of the Nasdaq 100 fell 1.4%. The Innovator IBD 50 ETF (FFTY) fell 3.2%.
Crude oil rose 1.1% to $76.52 a barrel. Bitcoin futures fell another 0.8% to $19,915.
The 10-year US Treasury yield fell 22 basis points to 3.69% as investors fled to lower-risk assets.
The Labor Department’s nonfarm payroll in February rose 311,000 versus Econoday’s consensus of 223,000. The private payroll increased by 265,000 against the 213,000 expected. Manufacturing payrolls fell 4,000 from the expected increase of 10,000. The unemployment rate climbed to 3.6% from 3.4% expected.
Stock Market Woe: Bank Stock Sell-Off Intensifies
SVB Financial (SIVB) plunged more than 60% in premarket trading on top of yesterday’s 60% drop, triggering a halt in trading. The California Department of Financial Protection and Innovation closed the bank on Friday. Silicon Valley Bank’s parent company is facing a liquidity crunch that has sparked fears about the wider banking industry.
sunrun (RUN) was pulled down 12.3% on SVB news. The solar battery and storage company is a loan client of SVB Financial.
Bank of the First Republic (FRC) sold but pared earlier losses to 14.9%, adding to Thursday’s 16.5% decline.
Signature Bank (SBNY) fell 22.9% in very large volume. This added to yesterday’s 12.2% selloff.
The banks’ sell-off affected banking ETFs, with the SPDR S&P Regional Banking ETF (KRE) down 4.4%, on top of Thursday’s 8.1% drop. The SPDR S&P Bank (KBE) ETF fell 4.1%.
The sale spread to other financial stocks, with a broker Charles Schwab (SCW) down 11.7%. The Financial Select Sector SPDR ETF (XLF) fared better, down 1.8%.
S&P 500 breaks final support; What to do now
Stock movers: Caterpillar is the dog of the Dow
caterpillar (CAT) fell 5.8% after UBS downgraded the stock to sell from neutral, saying there are signs demand for heavy machinery is slowing.
Stocks fell further below the 50-day moving average. The breakout could be interpreted as a sell signal, although the stock is technically forming a base. CAT was the biggest loser in the Dow today.
FTI Council (FCN) rose 3.7% and broke off a choppy 35-week base, breaking above the buy point of 188.70. Shares jumped on news that FTI has expanded its partnership with legal technology firm Relativity to expand into Australia.
On Feb. 23, FTI posted a beating on fourth-quarter results, rising its shares 10.5%. The global firm specializes in finance, litigation, economic, technological and strategic advice.
DocuSign (DOCU) lost 22.9% after reporting its fourth quarter results and announcing the resignation of the digital documents company’s chief financial officer.
Oracle (ORCL) lost 3.2% after announcing mixed results Thursday after the bell for the quarter ended in February. ORCL sank deeper below its 50-day line.
Chinese solar stock JinkoSolar (JKS) fell 12.8% in volume, after reporting a fourth-quarter EPS failure and a sales beat. Shares fell below the 50-day line and spoiled a cut base that had been building since January.
Gap (GPS) fell 6.1% after reporting worse-than-expected fourth-quarter results, including a loss for its quarter ended in January. The news sent shares below the 200-day line. A breakout at 13.76 failed.
Follow Kimberley Koenig for more stock insights on Twitter @IBD_KKoenig.
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