The Dow Jones Industrial Average fell more than 100 points, near the 32,000 mark, plunging for the fourth straight day amid concerns over a liquidity crisis in the banking sector.
As of 9:44 p.m. Thai time, the Dow Jones Industrial Average was 32,079.54 points, down 175.32 points or 0.54%.
Banking stocks led the market down today. Continued from yesterday’s collapse
Investors are concerned that the US banking sector will suffer the same liquidity problem as Silicon Valley Bank (SVB) due to losses in US Treasury holdings. which has a lower portfolio value After the US Federal Reserve (Fed) announced to continue raising interest rates to stem inflation.
In addition, the market is worried that the banking sector will face more bad debt as the Fed accelerates to raise interest rates.
The New York Stock Exchange suspended trading of SVB Financial Group shares today pending the release of information that would affect market prices.
CNBC previously reported, citing sources, that SVB Financial Group, the parent company of Silicon Valley Bank (SVB), lends to technology startups. Currently in negotiations to sell the business. following a failed sale of shares to recapitalize the bank
Sources stated that Several large banks are interested in acquiring SVB.
SVB’s share price plummeted 45.61% to $57.68 before the market opened today. After the market closed yesterday, it fell 60.41% to $106.04.
SVB announced plans to sell shares to investors for $2.25 billion to raise liquidity. After suffering a loss of $1.8 billion on the sale of US Treasury bonds. which has greatly reduced the value of the portfolio from the Fed’s announcement to continue raising interest rates
SVB is also suffering from cash flow problems as startups withdraw deposits from banks.
SVB had a market capitalization of $16.8 billion last week, but as of yesterday’s close, SVB’s market capitalization was only $6.3 billion. And it is expected that the market value will decrease further. After the market closed today
The US released the slowdown in employment numbers today. Although still higher than analysts’ expectations
In addition, investors are concerned regarding inflation. After the average hourly wage of workers increased less than expected.
According to the US Department of Labor, Non-farm payrolls rose by 311,000 in February. That was above analysts’ expectations of 225,000, but slowed from 504,000 in January.
The unemployment rate rose to 3.6 percent, above analysts’ expectations of 3.4 percent.
In addition, workers’ average hourly wages rose 0.2 percent month-on-month. This was below analysts’ expectations of 0.4% and a 4.6% increase year over year. This was below analysts’ expectations of 4.8%.
Hourly wage numbers are the top priority for the Federal Reserve (Fed) in looking for signs of inflation.