U.S. equities are lower as pressure has returned to the banking sector, which remains top of mind. However, the major indexes are on track to post gains for the week, despite the severe tumultuousness over the past week and a half. Treasury yields are again moving lower, and the U.S. dollar is declining, while crude oil prices continue to tumble, and gold is rallying. Other equity news is light, but FedEx posted quarterly results that beat the Street and offered an upbeat outlook. Economic news is on the somber side, as the February Leading Economic Index fell for an eleventh-straight month, consumer sentiment for this month surprised to the downside, while industrial production came in flat. Asia finished with gains across the board, and markets in Europe are falling, as stress surrounding the turbulence in the banking sector persists.
At 10:50 a.m. ET, the Dow Jones Industrial Average is falling 1.4%, and the S&P 500 is losing 1.2%, and the Nasdaq Composite is 1.0% lower. WTI crude oil is falling $1.75 to $66.59 per barrel, and Brent crude oil is down $2.07 at $72.63 per barrel. The gold spot price is jumping $35.70 to $1,958.70 per ounce, and the Dollar Index is declining 0.2% to 104.19.
The banking sector remains in focus in the wake of yesterday's report that some of the nation’s largest banks have agreed upon a plan to deposit as much as $30 billion in an attempt, supported by the U.S. government, to stabilize First Republic Bank (FRC $28). The deal comes after Bloomberg reported that the struggling bank may be exploring strategic options that include a sale and weighing options for shoring up its liquidity. The company acknowledged the support from the consortium after updating its financial position late Thursday. The turmoil has fostered severe volatility in the markets and fueled concerns about contagion in the financial markets. Meanwhile, the Treasury Department, the Fed and Federal Deposit Insurance Corporation (FDIC) have enacted several measures to contain the issue.
The turbulence originated in the U.S. banking sector after the failures of SVB Financial Group (SIVB), and crypto-related Silvergate Capital Corp. (SI), and the closure of Signature Bank (SBNY) in the past week. The anxiety made its way across the pond as Credit Suisse Group AG's (CS $2) top shareholder, the Saudi National Bank, said it will not provide more capital assistance. However, the lender announced that it will borrow $54 billion from the Swiss National Bank.
For a look at what our experts think about the recent stock market drop, read our latest article, Bank Worries Strike Again, as well as Schwab's Chief Fixed Income Strategist Kathy Jones' latest article, Bank Turmoil: What Does It Mean for Fed Policy? Kathy notes that the situation may relieve some pressure on the Federal Reserve, possibly leading to a pause or slowing in its current rate-hike cycle.