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Stock Market News for Mar 10, 2023

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Wall Street closed sharply lower on Thursday, led by a massive selloff in banks and financial stocks, while investors awaited the key February employment data that could help them gauge how large the interest rate hike could be in the Fed's next policy meeting. All three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) tumbled 1.7% or 543.54 points to close at 32,254.86 points, recording its lowest close since Nov 3, 2022.

The S&P 500 plummeted 1.9% or 73.69 points to finish at 3,918.32 points. Financial stocks were the biggest losers.

The Financials Select Sector SPDR (XLF) slid 4.1%. Also, the Materials Estate Select Sector SPDR (XLB) lost 2.6%, while the Industrial Select Sector SPDR (XLI) gave up 1.5%. All 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq slipped 2.1% or 237.65 points to end at 11,338.35 points.

The fear-gauge CBOE Volatility Index (VIX) was up 18.32% to 22.61. Decliners outnumbered advancers on the NYSE by a 5.12-to-1 ratio. On Nasdaq, a 3.83-to-1 ratio favored declining issues. A total of 11.69 billion shares were traded on Thursday, higher than the last 20-session average of 10.95 billion.

SVB Financial, Silvergate Weigh on Wall Street

Wall Street opened in the green but stocks gave up early morning gains following two major announcements. First, tech-industry lender SVB Financial Group launched an asset sale of $1.75 billion in a bid to shore up its balance sheet owing to a major decline in deposits from startups as they are struggling for funds. SVB Financial’s shares plummeted 60.4% following the announcement.

Second, Silvergate Capital Corporation , a major lender to the crypto industry, announced that it will be shutting down operations and liquidating its bank. Following the announcement, the stock tumbled 42.2%.

These weighed on other financials and bank stocks, dragging the S&P 500 financial sector down by 4.1% to record its worst day since June 2020. Shares of other major banks also tumbled. Shares of Bank of America Corporation (BAC - Free Report) and Wells Fargo & Company (WFC - Free Report) each declined 6.2%. Wells Fargo has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Investors are also awaiting Friday’s key nonfarm payrolls data that will help them gauge how large the interest rate hike could be in Fed next policy meeting in the next two weeks from now. Several economists are expecting a positive surprise to the upside, after robust job additions in January.

Economic Data

Unemployment data released on Thursday suggest that the job market may have finally started to slow, which is a must for bringing down inflation to the Fed’s target level of 2%. The Labor Department reported that jobless claims totaled 211,000 for the week ending Mar 4, increasing 21,000 from the previous week’s unrevised level of 190,000. The four-week moving average was 197,000, an increase of 4,000 from the previous week’s unrevised average of 193,000.

Continuing claims came in at 1,718,000, an increase of 69,000 from the previous week’s revised level of 1,649,000. The 4-week moving average was 1,679,500 an increase of 9,500 from the previous week's revised average of 1,670,000.


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