Wall Street stocks fell again Wednesday as concerns about European and American banks grew.
In early trade, the S&P 500 was down 1.5%, while markets throughout Europe plummeted even more precipitously as Credit Suisse shares in Switzerland hit a new low.
As of 10:15 a.m. Eastern time, the Dow Jones Industrial Average was down 482 points, or 1.5%, at 31,672, while the Nasdaq composite was down 1.2%, per a report from The Sacramento Bee.
With the failures of Silicon Valley Bank and Signature Bank, the second and third worst bank collapses in US history this week, Wall Street's intense focus has shifted to the banking sector, with many worried about what may break next. The value of US banking stocks fell once again.
After a one-day break on Tuesday, Wednesday brought back the strain. Smaller and medium-sized banks took the worst hits since they are more vulnerable to a run on their funds from depositors. A day after a 27% increase, shares of First Republic Bank dropped 7.7%. The stock of Huntington Bancshares fell 5.7 percent.
US officials shut down Silicon Valley Bank and Signature Bank over the weekend, but on Sunday night, the federal government unveiled a plan to safeguard depositors at the two banks. Markets have subsequently oscillated between panic and calm.
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European Bank Stocks Fall
Stocks in the banking sector fell substantially on European exchanges on Wednesday, after the worldwide ramifications from the Silicon Valley Bank collapse and further terrible news for Credit Suisse. The index dropped 2.5%, with losses across all market segments.Energy stocks were down 5.4%, while the banking sector fell 6.3 percent, per CNBC.
After the Silicon Valley Bank collapse, confidence in the Swiss banking behemoth Credit Suisse has plummeted to new lows.
Around 20% of the company's stock was sold off after it reported "material weakness" in its accounting system yesterday, according to BBC.
Investors are concerned about the bank's ability to deal with the aftermath of bank collapses in the United States.
All of the main stock market indices dropped significantly as the fears circulated. Credit Suisse's issues have prompted speculation about whether we are seeing the start of a worldwide catastrophe or whether this is just an "idiosyncratic" incident, as observed by Andrew Kenningham of Capital Economics.
The Bank's CEO reassured investors that the institution was "still very very strong" financially and denied rumors of financial trouble.
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