Today's stock market news Equities fell after the jobs report and the SVB's demise.
U.S. stocks plunged on Friday as investors became uneasy following the shocking bankruptcy of Silicon Valley Bank (SIVB) and a vital jobs report that came in warmer than anticipated.
As the Dow Jones Industrial Average (DJI) fell 1.1%, the S&P 500 (GSPC) fell 1.4%. Contracts on the heavily tech-focused Nasdaq Composite (IXIC) fell 1.8%. The Friday declines made for an even worse week for Wall Street. Since at least November, all three indices saw their worst weeks.
Bond yields decreased. The benchmark 10-year U.S. Treasury note's yield decreased to 3.68% on Friday.
The jobs data and Silicon Valley Bank's ongoing tale, which made it the biggest financial institution to fail since the 2008 financial crisis, were the two key financial events that Wall Street processed on Friday.
The unemployment rate increased slightly to 3.6%, and pay growth increased by 4.6% annually, slower than anticipated.
"Just start with the fundamentals. Without a doubt, the labor markets are robust. The average number of nonfarm payrolls over the past three months has been 351,000 "Head of Economics at Renaissance Macro Research Neil Dutta released a statement.
I can understand why the soft-landing bulls are jumping on today's report given the rise in the participation rate and the slower wage growth (primarily a composition story), especially considering the preconditions. However, let's state the obvious: the Fed still has work to do. The cost of terminals is still rising. Oh, and it's time to mute those who are discussing the weather, the approaching recession, and labeling the no-landing story a fraud "Added he.
According to the Bureau of Labor Statistics, employment increased noticeably in the sectors of leisure and hospitality, retail trade, government, and health care, while information, transportation, and warehousing declined.
The Federal Reserve has been keeping a tight check on all fronts of the labor market as the central bank works to temper down inflation. Even while other recent government data indicates that the economy is slowing down, February's job report showed that the hot hiring trend was still going strong.
The question of whether the Fed would raise interest rates by 0.25% or 0.50% at its March meeting has come up as a result of the accumulating economic data.
Market investors are betting that the Federal Reserve will raise interest rates by a quarter-point at its upcoming meeting, according to the CME FedWatch tool.
U.S. bank regulators took over Silicon Valley Bank on Friday after the lender's attempts to obtain new capital were unsuccessful. The problem at Silicon Valley Bank has Treasury Secretary Janet Yellen keeping an eye on a "few banks," she said on Friday.
Before trading was stopped on Friday morning, the share price of the bank fell 68%.
The negative mood has permeated markets as the KBW Bank Index (BKX) dropped by almost 4%, while index constituents Bank of America (BAC) and JPMorgan Chase (JPM) recovered to gain 3%.
First Republic Bank (FRC) fell 15%, PacWest Bancorp (PACW) fell 38%, Western Alliance Bancorp (WAL) fell 21%, and Signature Bank (SBNY) fell 23%, among other regional bank stocks.
Other single-stock swings included a 47% decline in Allbirds (BIRD) shares following the footwear retailer's dismal quarterly results announcement, which also showed a double-digit decline in sales and a $101 million yearly deficit. Also, there is a change in leadership as Chief Financial Officer Mike Bufano is departing the organization.
Shares of DocuSign (DOCU) fell 23% after JPMorgan analysts downgraded the stock, citing unimpressive demand expectations. Despite exceeding expectations for earnings and sales, CFO Cynthia Gaylor stated that she would be retiring this year.
In other cryptocurrency market news, Silvergate Capital (SI) was liquidated, and regulatory pressure on the sector caused Bitcoin (BTC-USD) to fall below $20,000 on Friday.
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