4:05pm: Seeing red to end the week
A tumultuous week for the markets has come to an end with US stocks finishing up Friday in the red.
At the close, the Dow Jones had shed 1.2% at 31,862 points, the S&P 500 was down 1.1% at 3,917 points, and the Nasdaq Composite lost 0.7% at 11,630 points.
Gold, however, was a bright spot, ending the day up 3% at $1,981.50, while silver had added 4.2% at $22.60.
12:05pm: First Republic Bank stock drops 25% even as banking group steps in
US stocks were sharply lower in noon trading even after a consortium of 11 big US banks joined forces to deposit $30 billion into First Republic.
At midday, the Dow lost 443 points to 31,804, while the S&P 500 eased 49 points at 3,911 and the tech-heavy Nasdaq slipped 118 points to 11,599.
“There’s nervousness into the weekend of: How does this all look on Monday?,” Globalt Investments senior portfolio manager Keith Buchanan said.
“The market is nervous about holding stocks into that,” he added.
Notable movers included shares of FedEx (NYSE:FDX), which climbed about 8% after the company’s fiscal third-quarter earnings surpassed analyst expectations.
9:40am: Bank stocks fall again
Shortly after the opening bell, the Dow was down 180 points, 0.6%, to 32,066, the Nasdaq Composite lost 15 points, 0.1%, to 11,703 and the S&P 500 declined 9 points, 0.2%, to 3,051.
Despite a rough week for the banking sector, the benchmarks are on pace to finish ahead on the week.
That hasn't stopped First Republic Bank from falling more than 20% Friday morning and Credit Suisse from losing more than 6%.
“There’s a push-pull in the market right now,” said Infrastructure Capital Advisors’ CEO Jay Hatfield, per CNBC. “The regional banking crisis is a huge negative for the economy and the market. But the overhang that existed prior to the banking crisis was an overly hawkish and irrational Fed.”
7:30am: Souring sentiment
Wall Street is expected to open lower, reversing some of Thursday’s strong gains after news of a bailout package for First Republic Bank to help stem further contagion in the sector helped fuel a recovery, with investors now looking to next week’s Federal Open Market Committee (FOMC) meeting for the Fed’s interest-rate response.
Futures for the Dow Jones Industrial Average declined 0.4% in Friday pre-market trading and those for the broader S&P 500 index shed 0.3%, while contracts for the Nasdaq-100 were flat.
A group of 11 financial institutions, including tier-1 banks Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), deposited $30 billion at embattled First Republic Bank, saying in a statement that regional, midsize and small banks are critical to the health and functioning of the financial system.
At the close on Thursday, all three major indices were in positive territory, with the Nasdaq leading the way at 11,717 points for a 2.5% gain, while the S&P 500 saw a 1.8% recovery to close at 3,960 and the Dow gained 1.2% to 32,247 points.
With stock futures turning negative, James Hughes, chief market analyst at Scope Markets, said “ the sentiment right now does seem to be souring.”
“That’s arguably no surprise following another US regional bank rescue last night and the fact that today also see triple witching hour when there’s a whole slew of US options set to expire just ahead of the closing bell,” Hughes commented. “There’s also the prospect of another FOMC policy meeting next week which almost inevitably seems set to see a further quarter point added to the target rate.
“Economic data today revolves around the Michigan Consumer Sentiment which may show a modest uptick, something that Fed policy hawks could call on to defend their stance, but it’s difficult not to be looking at market behaviours this week and conclude that something looks broken,” he added.