Dow futures drop 500 points as Credit Suisse slide adds to financial sector woes: live updates

Shares of big US banks came under pressure in premarket trading as traders monitored Credit Suisse’s troubles.

Actions of fargo wells and citi fell 4% each, while Bank of America submerged 3%. JPMorgan and Goldman Sachs shed about 2%.

Shares of the largest US banks have been mostly firm in recent days relative to shares of regional banks, which were seen as riskier after the collapse of Silicon Valley Bank.

—Jesse Pound

Swiss lender Credit Suisse’s ADR shares fell 21% in premarket trading.

The Saudi National Bank said it could not provide more funds, reported Reuters. “We can’t because we would go above 10%. It’s a regulatory problem,” Saudi National Bank president Ammar Al Khudairy told Reuters on Wednesday.

The troubled Swiss bank said earlier this week had found “material weaknesses” in its financial reports for 2022 and 2021.

-John Melloy

Several European banking names came to a halt on Wednesday as a sharp drop in Credit Suisse shares dragged the sector down: along with the broader market.

Shares in Societe Generale, along with Italy’s Monte dei Paschi and UniCredit, have been halted. Meanwhile, Credit Suisse fell 20% after its biggest investor said it would not provide further assistance to the troubled bank.

These moves come as traders around the world grapple with the fallout from the Silicon Valley Bank failure.

“The failure of Silicon Valley Bank has spilled over into the European stock market,” Beata Manthey, a Citi strategist, wrote. “While US policymakers have stepped in to limit contagion risks, the current volatility in bank stocks means broader contagion effects may still be at play.”

Manthey noted that the conditions were ripe for profit in the European markets. “However, investors remain net long European banks, even though they trimmed their position from the long highs just a month ago. This means positioning could still be further loosened.”

— Fred Imbert Michael Bloom

European stock markets opened lower, with bank shares still in negative territory after the global fallout from Silicon Valley Bank.

The pan-European Stoxx 600 Index fell 0.4% towards the start of trading, with most sectors and major exchanges trading in the red. Retail stocks led the losses, down 1.9%, followed by oil and gas stocks, which were down 1.4%. Bank shares fell 0.5%.

—Hannah Ward-Glenton

german car manufacturer bmw said on Wednesday that it expects an EBIT (earnings before interest and tax) margin of between 8-10% for its automotive range in 2023, with deliveries scheduled for slightly up from 2022. Selling prices are intended to remain at a “stable” level.

The company restated the results for the full year 2022 reported last weekincluding an EBIT of 10.6 billion euros ($11.4 billion) for its automotive segment, which had a margin of 8.6% last year.

BMW is undertaking a broad rollout of battery electric vehicles and anticipates reaching more than 50% BEV share well before 2030. The company’s BEV share is scheduled to reach 15% by 2023.

— Ruxandra Iordache

from China Industrial production it rose 2.4% in the January-February period, official data showed.

Retail sales increased 3.55% for the same period, in line with expectations.

China’s fixed asset investment in the first two months of the year rose 5.5%, higher than the expectations of economists polled by Reuters, who forecast growth of 4.4%.

China’s onshore yuan it weakened after the data was released and traded at 6.8822 against the US dollar.

He People’s Bank of China maintained the 481 billion yuan one-year medium-term loan rate at 2.75%.

Japan’s financial stocks rose on Wednesday morning, reversing the direction seen earlier in the week and following the rally in Wall Street banks.

shares listed in Tokyo Mitsubishi UFJ Financial Group increased 3.25%, Sumitomo Mitsui Financial Group gained 2.73% and Mizuho Financial Group also rose 2.04%. Nomura Holdings also rose 1.7%.

Meanwhile, tech giant SoftBank Group continued to post marginal losses of 0.62%.

Hong Kong’s Hang Seng Index led gains in the Asia-Pacific region as it rose 2.35% on Wednesday, boosted by technology and healthcare stocks.

Some of the top gainers in the index were search engine companies Baiduwhich gained 6.28%, Alibaba Health Information Technology rose 5.59%, and the internet company netwhose shares rose 4.02%.

However, the main winner in the HSI was Orient abroad (international), which jumped 9.49%. The company is the parent company of the container shipping company Orient Overseas Container Line.

—Lim Hui Jie

Quantitative market indicators watched at Bank of America by a team led by quant and cross-asset strategist Alex Makedon and quant and equity strategist Savita Subramanian confirm that the US economy fell “deeper” into recession (from a phase late in the business cycle) for a second straight month in February, according to a report released Tuesday.

Going back to 1990, similar conditions prevailed seven times, and the recession lasted an average of 12 months (but ranged from six months in 1995-1996 to 19 months during the global financial crisis), BofA said.

Furthermore, “cash IS the alternative now,” BofA said, adding that “we see cash as more attractive than stocks given our expectation of an S&P 500 total return of just 2% to 3% this year” compared with a 5% cash yield on short-term T-bills and bank economists “still expect a terminal rate of 5.25-5.5% even after recent events.”

The best capital investment strategies revolve around those that are based on the companies’ cash flow, the team wrote. Those strategies, which emphasize free cash flow to enterprise value or price to free cash flow ratios, “outperformed the ratio in previous recessions, especially outside of the zero interest rate policy (ZIRP) era.” ), when cash was of little value. These factors continue to be ignored by active and economic managers vs. history.”

BofA’s idea is that stocks that offer free cash flow and dividends represent a “bird in the hand,” while high P/E and growth stocks are “buy the dream” ideas. Unfortunately for those counting on a revival of past leaders, “long-duration stocks in equities (the ‘buy the dream’ growth stocks that are more sensitive to funding costs) may have more room to wobble.” BofA said.

—Scott Snapper

lennar — Home construction stocks gained about 3% in extended trading. Lennar beat analysts’ earnings and revenue expectations for the latest quarter, according to Refinitiv. The company posted earnings of $2.06 per share on revenue of $6.49 billion.

First Republic — Shares of the regional bank moved once again after the bell, up 8.9%. Other bank names western alliance and keycorp it also rose, gaining around 5% and 3%, respectively.

Read the full list of stocks on the move after hours here.

—Samantha Subin

Among the 15 S&P 500 stocks that hit new 52-week lows on Tuesday was 3M, which fell to its lowest point since February 2013. Once known as Minnesota Mining and Manufacturing, 3M is the only stock of the 15 that it is also in the Dow Jones Industrial Average.

• net dish (DISH), the lowest since 2009
• Hasbro (HAS), the lowest since March 2020
• VF Corporation (HRV), the lowest since 2011
• Hormel (HRL), the lowest since 2019
• Devon Energy (dvn), the lowest since January 2022
• hundreds (CNC), the lowest since October 2021
• CVS Health (cvs), the lowest since April 2021
• south west (light), the lowest since May 2020
• 3M (HMM), the lowest since 2013
• digital generation (GENE), the lowest since March 2020
• CF Industries (CF), the lowest since February 2022
• western rock (WRC), the lowest since August 2020
• Advanced auto parts (AAP), the lowest since May 2020
• Organ (OGN), the lowest since the Merck spin-off in June 2021
• boston properties (BXP), the lowest since 2009

Three S&P 500 stocks hit new 52-week highs on Tuesday:

• Arista Networks (aneta), all-time high since the 2014 IPO
• Cadence Design Systems (CDNS), all-time high since ECAD went public in 1987
• GE Health Technologies (GEHC), all-time high until GE spin-off in December 2022

—Scott Schnipper, Christopher Hayes