Wall Street opens lower, the market remains feverish
The New York Stock Exchange opened in the red on Friday amid renewed investor jitters over instability in the banking system, with First Republic and other regional institutions plunging again.
Around 1:50 p.m. GMT, the Dow Jones retreated by 0.80%, the Nasdaq index fell by 0.25% and the broader S&P 500 index yielded 0.48%.
Wall Street ended Thursday’s session with a bang, enthused by the intervention of a group of large American banks, which will deposit 30 billion dollars in the coffers of First Republic, considered the new weak link in the system.
The euphoria was short-lived and the indices quickly showed signs of running out of steam in post-close electronic trading.
“The question now is whether it will be enough,” said Quincy Krosby of LPL Financial about the boost from the big names in the square to First Republic. “Questions remain about the soundness of the financial system.”
Rising by more than 10% the day before after having lost up to 36% in session, First Republic was again in dire straits and fell by 17.19% shortly after the opening.
Other regional and medium-sized brands were targeted, such as Californian PacWest (-10.35%), Western Alliance (-6.30%), headquartered in Phoenix (Arizona) or the Texan Comerica (-9.77%).
The big banks were also in turmoil, like Goldman Sachs (-2.76%) and JPMorgan Chase (also -2.76%), which pulled the Dow Jones down.
The VIX index, which measures market volatility, rose more than 5%.
Friday is a so-called “four witches” day, which corresponds to the expiry of several trillions of dollars of derivatives based on stock market indices or individual stocks.
This deadline often increases volatility on Wall Street during the session in question.