Dow closes more than 300 points lower, posts worst week since June as Silicon Valley Bank collapse sparks selloff: Live updates

Stocks tumbled Friday as tech-focused lender Silicon Valley Bank shut down after losses in its bond portfolio. It marked the biggest bank failure since the global financial crisis and sent shockwaves through the banking sector.

The Dow Jones Industrial Average was last down 436 points, or 1.3%, and on pace for a fourth day of losses. The S&P 500 dropped 1.7%, while the Nasdaq Composite shed 2.1%.

Regulators took control of Silicon Valley Bank on Friday, after shares tumbled Thursday and the bank struggled on Friday to find another lender to buy it. Regional bank stocks tumbled in the wake of Silicon Valley Bank’s demise, with the SPDR S&P Regional Banking ETF lost nearly 4.4%. For the week, the regional bank fund lost 16%, its worst week since March 2020 as the pandemic hit.

“You had a major U.S. bank collapse, the biggest bank failure since 2008, inevitably that’s going to spook the market,” said Sylvia Jablonski, CEO and chief investment officer of Defiance ETFs. The failure, she added, is also fueling concern among investors over whether the contagion spreads beyond SVB.

Several bank stocks were repeatedly halted on Friday, including First Republic, PacWest and crypto-focused Signature Bank. Shares fell between 14.8% and 37.9%. Some bellwether bank stocks suffered smaller losses even as SVB’s fallout wreaked havoc on regional names. Goldman Sachs and Bank of America fell 4.2% and 0.9% respectively. JPMorgan held onto a 2.5% gain.

Wall Street is coming off a down session, with the Dow losing more than 500 points Thursday. For the week, the Dow is down 4.2%, on pace for its worst week since September 2022, while the S&P 500 was off by 4.2%.

“This is gamebook play, where traders and shorter term investors don’t want to be long over the weekend,” said Rich Steinberg, chief market strategist at The Colony Group.

The turmoil among bank stocks overshadowed a February jobs report, which gave some hints that inflation could be slowing. Payrolls increased more than expected, but investors focused on the smaller-than-expected gain in wages, which could cause the Federal Reserve to rethink more aggressive on rate hikes.

The 10-year Treasury yield dropped 22 basis points to 3.704%. The spike in rates this year has weighed on stocks so that reversal Friday lent some support. (1 basis point equals 0.01%.)