U.S. stocks fell again Wednesday, with the Dow Jones Industrial Average touching its lowest level in over four months, as concerns over the banking sector spread to Swiss lender Credit Suisse.
Shares of Credit Suisse sank to a record low after its largest shareholder, Saudi National Bank, declined to offer more support to the troubled European bank after it reported problems with its financial reporting.1 The prospect of another bank failure further riled investors already shaken by the past week's shutdown of Silicon Valley Bank and two other U.S. regional lenders. Crude oil futures dropped under $70 a barrel to a 15-month low amid escalating recession concerns.
"Credit Suisse's problems were today's trigger, but markets were already on edge due to the banking issues in the U.S.," says Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.
The following is a round-up of today's market activity:
- The S&P 500 Index was down 27.26 (0.7%) at 3891.93; the Dow Jones industrial average was down 280.83 (0.9%) at 31,874.57; the Nasdaq Composite was up 5.9 (0.05%) at 11,434.05, after falling as much as 1.7% earlier.
- The 10-year Treasury yield was down about 16 basis points at 3.473%.
- Cboe's Volatility Index was up 2.41 at 26.14.
The Credit Suisse reports sent European bank stocks tumbling and overshadowed the release of weaker-than-expected data on U.S. producer prices and retail sales. Such data may have been welcome news to investors looking for reasons for the Federal Reserve to become less aggressive in its campaign against inflation.