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Thursday, March 30, 2023

Wall Street registers widespread falls due to fears of a banking crisis

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Wall Street’s main indices fall sharply this Friday, March 17, because investors were still startled by the possibility of a banking crisiseven as the country’s biggest banks came to the rescue of the beleaguered regional lender First Republic Bank.

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The index S&P 500 loses 1.10%Meanwhile he Dow Jones Industrial Average falls 423.49 points1.30%, to 31,823.06 units, and the Nasdaq Composite fell 87.15 points, 0.74%, to 11,630.12 units.

big banks like JPMorgan Chase & Co and Morgan Stanley They launched a life preserver on Thursday $30 billion to First Republiccalming some nerves and helping US stocks post gains in the previous session.

However, First Republic shares were down more than 25% in early trading after the bank suspended dividend payments.

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The lender’s shares have taken a beating this week, down 66%, in a sell-off of bank assets after the recent bankruptcy of SVB Financial and Signature Bank it unleashed fears of a broad banking crisis induced by interest rate hikes.

SVB Financial said on Friday that had filed for judicial reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets, days after its former Silicon Valley Bank unit was seized by US regulators.

The banks PacWest Bancorp and Western Alliance they fell off a 13.2% and 11.7%.

The large US banks, such as JPMorgan, Citigroup and Wells Fargo they also went down, between a 1.7% and 3.1%.

LMost of the top 11 sectors of the S&P 500 were down. The regional banking KBW and the S&P 500 banks fell more than 2% each.

“Deposits have fled regional banks like First Republic to the big banks, which are now bailing them out by returning their deposits. But that doesn’t solve the problem,” he said. thomas hayesChairman of Great Hill Capital LLC.

“Until the flight of deposits from regional banks to systemically important banks that are too big to fail is stopped, no matter how much money is put in the bucket“.

Source: Ambito

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