Bank stocks plunge and S&P 500 swings as Wall Street shakes
Wall Street is worried about what may be next to topple following the second- and third-largest bank failures in U.S. history, and stocks are swinging sharply Monday as investors scramble to find someplace safe to park their money, according to a report from the Associated Press.
The S&P 500 was virtually unchanged in morning trading, but only after tumbling 1.4% at the open. The sharpest drops were again coming from banks. Investors are worried that a relentless rise in interest rates meant to get inflation under control are approaching a tipping point and may be cracking the banking system and broader economy.
The most pressure is on the regional banks one or two steps below in size of the massive, “too-big-to-fail” banks that helped take down the economy in 2007 and 2008. Shares of First Republic plunged 66.3%, even after the bank said Sunday it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.
The broader market was holding up better as expectations built that the all the chaos means the Fed would have to take it easier on its economy-rattling hikes to interest rates. The Dow Jones Industrial Average was up 94 points, or 0.3%, at 32,004 as of 10 a.m. Eastern time, while the Nasdaq composite was 0.1% higher. Both erased sharp earlier losses.