The stock market is losing the battle; Bank closures affect the entire sector

The stock market’s major indexes are feeling more pain, falling to session lows in afternoon trade on Friday. Investors were rattled by the Silicon Valley Bank closing, which affects the entire sector.




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The Dow Jones Industrial Average fell 1.2 percent. The S&P 500 fell 1.5 per cent. The Nasdaq composite fell 1.8 per cent. The small-cap Russell 2000 underperformed, down 3.5%, weighed down by its 15% banking component.

NYSE and Nasdaq volumes were higher than Thursday at the same time.

The S&P 500 and Dow found resistance at their 200-day moving averages during an earlier rejection attempt today. The Nasdaq fell below its 50-day moving average, a day after it closed below the 200-day mark.

The tech-heavy Nasdaq 100-tracker Invesco QQQ Trust ETF ( QQQ ) sank 1.4%. Innovator IBD 50 ETF (FFTY) fell 2.9%.

Crude oil rose 1.3% to $76.68 a barrel. The Energy Select Sector SPDR ETF (XLE) fell 1%.

Bitcoin futures fell another 1% to $19,875. The 10-year US Treasury yield fell 19 basis points to 3.72%.

European shares closed lower, with the German DAX and Paris CAC down 1.3%. The London FTSE fell the hardest by 1.78% to close the trading week.

The Labor Department’s February nonfarm payrolls rose by 311,000 compared to Econoday’s 223,000 consensus. Private payrolls grew by 265,000 compared to the expected 213,000. Manufacturing wages fell by 4,000 compared to the forecast for an increase of 10,000. The unemployment rate crept up to 3.6% compared to the expected 3.4%.

Stock market problems: Sales of bank shares expand

SVB Financial ( SIVB ) plunged over 60% in premarket trade on top of yesterday’s 60% drop, triggering a trading halt. The California Department of Financial Protection and Innovation closed the bank on Friday. The parent of Silicon Valley Bank is facing a liquidity crisis that has sparked fears for the wider banking sector.

Solar run (RUN) was pulled down over 15% on the SVB news. The solar storage and battery company is an SVB Finansiel loan customer.

First Republic Bank (FRC) sold off but pared earlier losses, down 22% to add to Thursday’s 16.5% drop.

Signature Bank (SBNY) tumbled over 24% on very heavy volume. That’s on track for the biggest drop ever for the company, dating back to March 2004. It added to yesterday’s 12.2% selloff.

The overall bank selloff weighed on banking ETFs, with the SPDR S&P Regional Banking ETF (KRE) down 7% on top of Thursday’s 8.1% drop. The SPDR S&P Bank ETF (KRB) fell 24 per cent.

The sale spilled over into other financial matters, with the broker Charles Schwab (SCHW) falls 8%. The Financial Select Sector SPDR ETF ( XLF ) fared better, falling 2.2%.

Movers of stock market earnings

DocuSign ( DOCU ) fell over 20% after reporting Q4 earnings and news that the digital document company’s CFO is stepping down.

Oracle ( ORCL ) fell 3.6% after reporting mixed quarterly results for the end of February after hours on Thursday. ORCL sank deeper below its 50-day line.

Chinese solar stock JinkoSolar ( JKS ) plunged over 13% in heavy volume after reporting a Q4 EPS miss and a hit to sales. Shares fell below the 50-day line, spoiling a cup base that had been forming since January.

Gap (GPS) fell 6.1% after reporting worse-than-expected results for the 4th quarter, including a loss for the quarter ended in January. The news sent shares below the 200-day mark. An outbreak at 13:76 has failed.

For more stock news, follow Kimberley Koenig on Twitter @IBD_KKoenig.

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